CMS proposed rule aims to streamline prior authorizations and make data sharing easier

doctor paperwork
The Centers for Medicare & Medicaid Services issued a proposed rule aimed at reducing the process for prior authorization, which providers have complained is a major source of administrative burden and burnout. (Rawpixel)

The Trump administration proposed a new regulation aimed at improving the sharing of healthcare data between payers and providers and streamlining prior authorization, a major administrative hassle for providers.

The proposed rule, released Thursday by the Centers for Medicare & Medicaid Services (CMS), requires payers in certain government programs to build application programming interfaces (APIs) for data exchange and prior authorization. The rule tackles a common complaint from providers that prior authorization has increased in use among plans and takes up too much time away from patients.

“Prior authorization is a necessary and important tools for payers 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,” said CMS Administrator Seema Verma in a statement.

The rule applies to payers in Medicaid, the Children’s Health Insurance Program and qualified health plans. CMS noted that it is considering whether to include Medicare Advantage plans in a future rule.

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The APIs built by the payers will allow two systems, or a payer’s system or third-party app, “to communicate and share data electronically,” according to a release from CMS.

The APIs must also meet the Health Level 7 Fast Healthcare Interoperability Resources standard.

Prior authorization requires a provider to get approval from a payer for a service, prescription or a medical supply. But the requirement has become a major source of administrative burden that doctors and providers have been trying to rectify for years.

In 2018, a consensus statement led by major insurer lobbying groups and doctor groups called for improving the prior authorization process. But the American Medical Association wrote to lawmakers back in June asking them to step in because little progress was made on the issue.

CMS’ proposed rule would reduce the amount of time providers have to wait for a decision from a payer on a prior authorization request. It proposes a maximum 72-hour limit for payers for urgent requests and seven calendar days for nonemergency requests.

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There is an exception for qualified health plans on the federally run Affordable Care Act insurance exchanges. Payers also must spell out a reason for any denial.

“To promote accountability for plans, the rule also requires them to make public certain metrics that demonstrate how many procedures they are authorizing,” the agency said in a release.

The rule also mandates payers implement and maintain an API that makes it easier for exchanging patient data when a patient moves 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,” CMS said.