CMS Proposes Rule to Streamline Prior Authorization

Ken Terry

December 17, 2020

The Centers for Medicare & Medicaid Services (CMS) on December 10 proposed a new rule that it said would substantially reduce the burden of health plan prior authorization requirements on healthcare providers.

The proposed rule, which would take effect on January 1, 2023, would require certain kinds of CMS-regulated payers to build an application programming interface (API) for electronic prior authorization support. Such APIs could be used to send prior authorization requests and receive responses electronically within a physician's electronic health record (EHR) workflow.

The payers would also have to implement a separate API that would allow physicians to look up the documentation each health plan requires for prior approval of a test, procedure, or drug prescription.

The payers would also be required to make a determination on an urgent prior authorization request within 72 hours and on a nonurgent request within 7 calendar days. They would also have to provide specific reasons for denying a request.

The APIs would use the HL7 Fast Health Interoperability Resources (FHIR) standards that the government is increasingly requiring for a range of communications. Through CMS' Interoperability and Patient Access rule, which goes into effect on January 1, 2021, payers are required to share claims data and provider directories with their members, using similar FHIR-based APIs.

The proposed rule is the next step beyond the interoperability regulation. But whereas that rule applies to all CMS-regulated payers, which together cover about 85 million people, the proposed rule would apply only to Medicaid managed care plans and the issuers of individual plans on the federally facilitated marketplace, which is currently being used by 26 states.

CMS is considering whether to apply this rule to Medicare Advantage plans, according to a blog post by CMS Administrator Seema Verma.

Under the proposed rule, payers would have to publicly report data about their prior authorization process, such as the percentage of prior authorization requests approved, denied, and approved after appeal, as well as the average time between submission and determination. The goal of this provision is to give consumers additional information on which to base their choice of a health plan.

Other Kinds of Data Exchange

Under the CMS proposal, payers must also build a new provider access API for payer-to-provider sharing of claims and encounter data (not including cost data), a subset of clinical data (as defined in the US Core Data for Interoperability, version 1), and pending and active prior authorization decisions for both individual patient requests and groups of patients, starting January 1, 2023.

The proposal would also require payers to implement an FHIR-based API that would enable them to exchange claims data and a subset of clinical data, as well as information about pending and active prior authorization decisions, at a patient's request.

Payers would have to exchange these data when a patient enrolled in a new plan. Patients' new plans would be "encouraged" to consider the information from previous payers when making new prior authorization decisions, "potentially eliminating the need for patients and providers to repeat the prior authorization process with the new payer," CMS said in a fact sheet.

The Office of the National Coordinator for Health IT (ONC) is proposing to adopt implementation specifications for all these APIs. Having ONC work with CMS in this area would ensure full interoperability of the APIs and reduce the implementation burden, CMS said.

However, CMS also plans to issue a request for information on the uses of electronic prior authorization transactions and on whether new types of transaction standards might be useful. The agency said it wants to find out more about "the readiness and operational implications" of implementation specifications, suggesting that much is still unknown about the technical details of the project.

Goodbye Faxes?

Verma criticized the use of fax machines and phones as the primary conduit for prior authorization requests. According to the fact sheet, CMS wants to reduce the use of faxes in healthcare.

CMS said it planned to ask "the healthcare community" to find out where electronic data exchange could replace the fax. The agency did not mention that an electronic technology called Direct messaging has been increasingly doing that for the past several years. In the third quarter of this year, 169 million Direct messages were sent and received, according to DirectTrust, the nonprofit organization that maintains the trust network for Direct messaging.

Another technology not referred to in the CMS announcement is web-based prior authorization. Most health plans have websites dedicated to this method of information exchange. SureScripts and CoverMyMeds, among other firms, have prior authorization portals that providers can use to request authorization of prescription drugs from a number of health plans.

The problem with web-based prior authorization, from the viewpoint of physician practices, is that it requires physicians or their staff to leave the EHR workflow and go online to the health plan or other website. CMS' proposed solution would eliminate that bottleneck by inserting prior authorization into the regular workflow.

More than a year ago, the American Medical Association and a number of specialty societies called on CMS to reduce the harms and burdens of prior authorization by incorporating "consensus principles" into its policies and by encouraging other payers to do so as well.

The consensus principles, developed in cooperation with some payers, called for a more judicious application of prior authorization, a regular review of prior authorization programs to reduce the number of requirements, transparency and communication regarding prior authorization, consideration of the continuity of patient care, and automation to improve transparency and efficiency.

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