Association Executive Directors Community

  • 1.  CMS Final Rule

    Posted 01-17-2024 17:44

    Dear Association Executives,

    The Centers for Medicare & Medicaid Services (CMS) today released a final rule Wednesday, the CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F).

    The rule sets requirements for Medicare Advantage (MA) organizations, Medicaid and the Children's Health Insurance Program (CHIP) fee-for-service (FFS) programs, Medicaid managed care plans, CHIP managed care entities, and issuers of Qualified Health Plans (QHPs) offered on the Federally-Facilitated Exchanges (FFEs), and seeks to improve the electronic exchange of health information and prior authorization processes for medical items and services. Together, CMS estimates that these policies will improve the prior authorization process and reduce burden on patients, providers, and payers, resulting in $15 billion of estimated savings over a ten year period.

    The rule establishes requirements for certain payers to streamline the prior authorization process and complements the Medicare Advantage requirements finalized in the Contract Year (CY) 2024 MA and Part D final rule, which add continuity of care requirements and reduce disruptions for beneficiaries. Beginning primarily in 2026, impacted payers (not including QHP issuers on the FFEs) will be required to send prior authorization decisions within 72 hours for expedited (i.e., urgent) requests and seven calendar days for standard (i.e., non-urgent) requests for medical items and services. The rule also requires all impacted payers to include a specific reason for denying a prior authorization request, which will help facilitate resubmission of the request or an appeal when needed.

    The rule also requires impacted payers to implement a Health Level 7 (HL7) Fast Healthcare Interoperability Resources (FHIR) Prior Authorization application programming interface (API), which can be used to facilitate a more efficient electronic prior authorization process between providers and payers by automating the end-to-end prior authorization process.

    Payers will be required to implement an application programming interface to support a better, more efficient electronic automation process. CMS is delaying API compliance dates for the 2026 calendar year. Beginning in 2027, payers will be expected to have a prior authorization API, expand on its patient access API and implement a provider access API. With patient permission, data can be transferred from one payer's API to another.

    The final rule is available to review here:

    The fact sheet for this final rule is available here:

    Reyna Taylor
    Senior Vice President, Public Policy & Advocacy
    National Council for Mental Wellbeing