CMS Proposes New Rules to Address Prior Authorization and Reduce Burden on Patients and Providers

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December 10, 2020

Contact: CMS Media Relations
CMS Media Inquiries

CMS Proposes New Rules to Address Prior Authorization and Reduce Burden on Patients and Providers

Improving patient and provider access to medical records and reforming prior authorization processes critical in a public health emergency

Today the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would improve the electronic exchange of health care data among payers, providers, and patients, and streamline processes related to prior authorization to reduce burden on providers and patients. By both increasing data flow, and reducing burden, this proposed rule would give providers more time to focus on their patients, and provide better quality care.

The COVID-19 pandemic has shone a harsh light on many longstanding inefficiencies in the health care system—including the lack of data sharing and access. Today’s proposed rule aims to improve this for patients navigating care. The proposed rule would build on the Trump Administration’s Interoperability and Patient Access final rule published by the CMS in May.

“This proposed rule ushers in a new era of quality and lower costs in health care as payors and providers will now have access to complete patient histories, reducing unnecessary care and allowing for more coordinated and seamless patient care. Each element of this proposed rule would play  a key role in reducing onerous administrative burden on our frontline providers while improving patient access to health information,” said CMS Administrator Seema Verma. “Prior authorization is a necessary and important tools for payors to ensure program integrity, 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.”  Prior authorization is not only a leading source of burden, it is also a primary source of provider burnout, and takes time away from treating patients. If just a quarter of providers took advantage of the new electronic solutions that this proposal would make available, the proposed rule would save between 1 and 5 billion dollars over the next ten years. With the pandemic placing even greater strain on our health care system, the policies in this rule are more vital than ever.”

The rule would require payers in Medicaid, CHIP and QHP programs to build application programming interfaces (APIs) to support data exchange and prior authorization. APIs allow two systems, or a payer’s system and a third-party app, to communicate and share data electronically  Payers would be required to implement and maintain these APIs using the Health Level 7 (HL7) Fast Healthcare Interoperability Resources (FHIR) standard. The FHIR standard is an innovative technology solution that helps bridge the gaps between systems so both systems can understand and use the data they exchange.

On behalf of HHS, the Office of the National Coordinator for Health IT (ONC) is also proposing to adopt certain standards through an HHS rider on the CMS proposed rule.

Improving Prior Authorization

Prior authorization is an administrative process used in healthcare for providers to request approval from payers to provide a medical service, prescription, or supply. This process takes place before a service is rendered. The rule proposes significant changes to improve the patient experience and alleviate some of the administrative burden prior authorization causes health care providers. Medicaid, CHIP and QHP payers would be required to build and implement FHIR-enabled APIs that could allow providers to know in advance what documentation would be needed for each different health insurance payer, streamline the documentation process, and enable providers to send prior authorization requests and receive responses electronically, directly from the provider’s EHR or other practice management system. While Medicare Advantage plans are not included in today’s proposals, CMS is considering whether to do so in future rulemaking.

The proposed rule would also reduce the amount of time providers wait to receive prior authorization decisions from payers—the rule proposes a maximum of 72 hours for payers, with the exception of QHP issuers on the FFEs, to issue decisions on urgent requests and seven calendar days for non-urgent requests. Payers would also be required to provide a specific reason for any denial, which will allow providers some transparency into the process. To promote accountability for plans, the rule also requires them to make public certain metrics that demonstrate how many procedures they are authorizing. 

These policies, taken together, could lead to fewer prior authorization denials and appeals, while improving communication and understanding between payers, providers, and patients. They are the result of numerous listening sessions with plans and providers aimed at crafting a new process that balances the need for greater efficiency and consistency in prior authorization and its important role in preventing fraud, abuse, and unnecessary expenditures.

Increasing Patient Access to Health Information

Building on that foundational policy, this rule would require impacted payers to implement and maintain a FHIR-based API to exchange patient data as patients move from one payer to another. In this way, patients who would otherwise not have access to their historic health information would be able to bring their information with them when they move from one payer to another, and would not lose that information simply because they changed payers.

These proposed changes would also allow payers, providers and patients to have access to more information including pending and active prior authorization decisions, potentially allowing for fewer repeat prior authorizations, reducing burden and cost, and ensuring patients have better continuity of care. To read more on the importance of these proposed changes, please visit CMS Administrator Seema Verma’s blog post here: https://www.cms.gov/blog/reducing-provider-and-patient-burden-and-promoting-patients-electronic-access-health-information

The proposed rule is available to review today at: https://www.cms.gov/files/document/121020-reducing-provider-and-patient-burden-cms-9123-p.pdf The comment period will close on January 4, 2021.

For a copy of the Fact Sheet, visit: https://www.cms.gov/newsroom/fact-sheets/reducing-provider-and-patient-burden-improving-prior-authorization-processes-and-promoting-patients

For more information on the CMS proposed rule, please visit: https://www.cms.gov/Regulations-and-Guidance/Guidance/Interoperability/index

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