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Here's how CMS wants to overhaul prior authorization


CMS on Tuesday issued a proposed rule to overhaul prior authorization, streamlining requests and sharing health care data more readily—a move that provider and payer groups have both commended.

CMS proposes new prior authorization rule

Under the proposed rule, state Medicaid agencies and Medicare Advantage (MA), Medicaid managed care, and Affordable Care Act plans all would be required to improve their prior authorization processes and respond to requests more quickly.

The proposed rule would require insurers to respond to "urgent" requests within 72 hours and standard requests within seven days—half the time MA plans currently receive to respond to prior authorization requests. Insurers also would be required to justify any denials and publish data on their prior authorization decisions.

Insurers would be required to build and maintain a Fast Healthcare Interoperability Resources (FHIR) application programming interface for electronic prior authorization requests as of Jan. 1, 2026.

The FHIR program would automatically determine whether a prior authorization request is necessary, identify any documentation requirements, and "facilitate the exchange of prior authorization requests and decisions" from a provider's EHR or practice management system, according to a CMS fact sheet on the rule.

The proposed rule also would require insurers to report publicly on certain prior authorization metrics on their websites as of March 31, 2026. A new electronic prior authorization measure would be added to the Merit-based Incentive Payment System to encourage clinicians and hospitals to adopt prior authorization technology.

"The prior authorization and interoperability proposals we are announcing today would streamline the prior authorization process and promote healthcare data sharing to improve the care experience across providers, patients and caregivers," CMS Administrator Chiquita Brooks-LaSure said in a statement.

CMS also has requested more information on standards for social risk factor data, the electronic exchange of behavioral health information, how to improve the exchange of documentation in the Medicare fee-for-service program, and the role of interoperability in improving maternal health outcomes.

CMS estimates the proposed rule will generate more than $15 billion in savings for providers over the next 10 years. Public comments on the proposed rule will be accepted through March 13, 2023.

Reaction

So far, reactions to the proposed rule from both provider and payer groups have been largely positive.

"The [American Hospital Association] commends CMS for taking important steps to remove inappropriate barriers to patient care by streamlining the prior authorization process for some health insurance plans," said Ashley Thompson, AHA's SVP for public policy analysis and development. "Prior authorization is often used in a manner that results in dangerous delays in care for patients, burdens healthcare providers and adds unnecessary costs to the healthcare system."

"An alarming number of medical groups report completing prior authorization requests via paper forms, over the phone, or through varying proprietary online payer portals," said Anders Gilberg, SVP of government affairs at the Medical Group Management Association. "The onerous methods of completing these requests, coupled with the increasing volume is unsustainable."

According to the Better Medicare Alliance, a payer advocacy group that pushes for Medicare Advantage policy, the proposed rule "complements our goals of protecting prior authorization's essential function in coordinating safe, effective, high-value care."

"Americans should have clear, concise and customized information with streamlined processes that improve healthcare quality, affordability and accessibility," said Matt Eyles, CEO of the health insurance trade group AHIP. "Health insurance providers are committed to delivering for them, and we look forward to continued partnership with the administration on these important issues."

According to Modern Healthcare, CMS' proposed rule is in line with the Improving Seniors' Timely Access to Care Act, a bill passed by the House in September that is expected to advance through the Senate this month. The bill requires MA plans to implement electronic prior authorization, as well as faster approval times for routine requests.

"We are pleased by HHS' proposed rule to streamline prior authorization processes, but comprehensive reform is needed to reduce the volume of prior authorizations and ensure patients' timely access to care," said Tochi Iroku-Malize, president of the American Academy of Family Physicians. "The rule is good news for family physicians and an important first step in alleviating burden and improving access to care. We continue to urge the Senate to swiftly pass the Improving Seniors' Timely Access to Care Act." (Tepper, Modern Healthcare, 12/6; King, Fierce Healthcare, 12/6; AHA News, 12/6; CMS press release, 12/6)

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