So long, fax machines? CMS finalizes rule aimed at streamlining prior authorizations, improving data sharing

Doctor and patient talking and discussing health treatment while sitting at the desk. Physician pointing into tablet pc.
The Centers for Medicare & Medicaid Services has finalized a rule aimed at overhauling prior authorization. (andrei_r/GettyImages)

The Trump administration finalized a rule aimed at improving the sharing of healthcare data between payers and providers and streamlining prior authorization.

The rule, released Friday (PDF) 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. It tackles a common complaint from providers that prior authorization has increased in use among plans and takes up too much time away from patients.

Officials said the final rule also builds on efforts to drive interoperability and empower patients by promoting secure electronic access to health data.

“Thanks to this rule, millions of patients will no longer have to wrangle with prior providers or locate ancient fax machines to take possession of their own data," CMS Administrator Seema Verma said in a statement. "Many providers, too, will be freed from the burden of piecing together patients’ health histories based on incomplete, half-forgotten snippets of information supplied by the patients themselves, as well as the most onerous elements of prior authorization. This change will reverberate around the healthcare system for years and decades to come.”

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

Under the rule, Medicaid and CHIP fee-for-service programs, Medicaid and CHIP managed care plans and issuers of individual market qualified health plans on the federally-facilitated exchanges must include "Patient Access API" claims and encounter data, including laboratory results, and information about the patient’s pending and active prior authorization decisions.

Payers are also required to share this data directly with patients’ providers if they ask for it and with other payers as the patient moves from one payer to another, officials said.

Among the requirements, CMS said: 

  • For the APIs that are required to be built, implemented and maintained, use the Health Level 7 Fast Healthcare Interoperability Resources standard to support automation of the prior authorization process.
  • Plans must meet reduced decision timelines for prior authorizations. Payers will now have a maximum of 72 hours to make prior authorization decisions on urgent requests and seven calendar days for non-urgent requests. Payers are also required to provide a specific reason for any denial beginning Jan. 1, 2024.
  • Payers must also make public their prior authorization metrics to demonstrate how they operationalize the prior authorization process.  

Medicare Advantage plans are not included or subject to the rule.