Medicare: Improving Prior Authorization
On January 17, 2024, the Centers for Medicare & Medicaid Services (CMS) finalized the CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F), as part the ongoing commitment to increasing health data exchange and strengthening access to care. 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), to improve the electronic exchange of health information and prior authorization processes for medical items and services. Together, these policies will improve prior authorization processes and reduce burden on patients, providers, and payers,
While prior authorization can help ensure medical care is necessary and appropriate, it can sometimes be an obstacle to necessary patient care when providers must navigate complex and widely varying payer requirements or face long waits for prior authorization decisions. This final 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, which add continuity of care requirements and reduce disruptions for beneficiaries.
Prior Authorization Decision Timeframes:
CMS is requiring impacted payers (excluding QHP issuers on the FFEs) 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.
Provider Notice, Including Denial Reason:
Beginning in 2026, impacted payers must provide a specific reason for denied prior authorization decisions, regardless of the method used to send the prior authorization request. Such decisions may be communicated via portal, fax, email, mail, or phone. As with all policies in this final rule, this provision does not apply to prior authorization decisions for drugs. This requirement is intended to both facilitate better communication and transparency between payers, providers, and patients, as well as improve providers’ ability to resubmit the prior authorization request, if necessary. Some impacted payers are also subject to existing requirements to provide information about denials to providers, patients, or both through notices. These existing notices are often required in writing, but nothing in this final rule changes these existing requirements.
Prior Authorization Metrics: We are requiring impacted payers to publicly report certain prior authorization metrics annually by posting them on their website.
These operational or process-related prior authorization policies are being finalized with a compliance date starting January 1, 2026, and the initial set of metrics must be reported by March 31, 2026.
Source: mlnconnects CMS news, 2024- 01-18
Michele Krpata, BSW, CPC, CPMA
Compliance Officer, Quality Reporting Analyst