CMS Finalizes Prior Auth Rule With Added Payer Requirements

The requirements will make exchanging health data more efficient and reduce administrative burden.

Today CMS finalized the Interoperability and Prior Authorization Final Rule, continuing its efforts to improve prior authorization processes.

The rule sets requirements to streamline prior authorization for Medicare Advantage, Children’s Health Insurance Program (CHIP), and Medicaid managed care plans, among others, as part of the MA and Part D final rule.

Issues with prior authorization have been a significant pain point for organizations and health systems, with many investing in different rev tech solutions to solve those problems.

“We’re in a crisis. We’re delaying care because we can’t get prior authorization, so therefore we have to get something in place,” Shanda Richards, revenue cycle director of Alaska’s Central Peninsula Hospital, previously told HealthLeaders.

According to a statement from the U.S. Department of Health and Human Services, the rule’s implementation will result in an estimated $15 billion in savings over ten years.

For one requirement, beginning in 2026, impacted payers will have to send prior authorization decisions for expedited requests within 72 hours, and seven calendar days for standard requests. Impacted payers will also be required to specify the reason for denying a prior authorization request, as well as publicly report prior authorization metrics.

Anders Gilberg, senior vice president of government affairs for Medical Group Management Association, voiced the organization’s support for the rule in a statement:

“The increased transparency provisions – requiring health plans to provide clarity on the reasoning behind care denials and to publicly report aggregated metrics about their prior authorization programs annually – will help shine a light on the egregious abuse of prior authorization by payers under the guise of looking out for patients’ best interests.”