CMS looks to crack down on prior authorization

CMS is aiming to alleviate the burden prior authorization puts on providers through a set of policies that would streamline the process and make it more efficient, according to a proposed rule released Thursday.

The rule would require payers with Medicaid, the Children’s Health Insurance Program and qualified health plans to build application programming interfaces, known as APIs, to allow data to be easily shared and exchanged between payer, providers and third-party apps. The proposed rule does not apply to Medicare Advantage plans.

The American Hospital Association largely cheered the news but was disappointed with the MA plan exclusion.

“The proposed rule is a welcome step toward helping clinicians spend their limited time on patient care,” Ashley Thompson, senior vice president of public policy analysis and development for AHA, said in a statement. “We urge the agency to reconsider and hold Medicare Advantage plans accountable to the same standards.”

In many instances, healthcare providers are required to get approval from insurers before performing certain services. Providers have long complained about such requirements as they can impede their ability to provide care in a timely manner.

The thrust behind the CMS policy is to let providers know in advance what documentation is required of them from an array of health plans in hopes of creating a more efficient prior authorization process. The rule builds on interoperability rules, which were finalized earlier this year and sought to give patients more control over their health data.

The latest proposed policy would also require payers to send a decision back to providers within 72 hours in some cases and provide a reason for a denial. Payers would also be required to make public just how many procedures they are approving.

CMS Administrator Seema Verma said in a statement that prior authorization is a necessary and important tool for payers, “but there is a better way to make the process work more efficiently to ensure that care is not delayed and we are not increasing administrative costs for the whole system.”

CMS estimates the proposal would save between $1 billion and $5 billion over the next 10 years.

Payers would also be responsible for building an API that allows patients to continually access their health information even after leaving one insurer for another, ensuring patients don’t lose access to that information.

CMS said it also would also cut down on repeated prior authorizations, which it says are unnecessary.

The comment period ends Jan. 4 and the policies in the rule are set to go into effect in 2023.