CMS Finalizes Rule to Expand Access to Health Information and Improve the Prior Authorization Process

Contributed by: Jim Pawelski, Director, Federation Relations, American Medical Association

As part of the Biden-Harris Administration’s ongoing commitment to increasing health data exchange and strengthening access to care, the Centers for Medicare & Medicaid Services (CMS) finalized the CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F) today. 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), (collectively “impacted payers”), 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, resulting in approximately $15 billion of estimated savings over ten years.

The American Medical Association will continue to analyze the details of the final rule, but their initial read suggests that CMS has taken important steps toward right-sizing the PA process by addressing both technological and operational requirements. Among the technology provisions is a requirement that impacted payers support an electronic PA process that is embedded within physicians’ electronic health records (EHR)—bringing much-needed automation and efficiency to the current time-consuming, manual workflow. In addition, CMS is curtailing payers’ PA processes by mandating shortened PA processing timeframes and significantly enhancing transparency around PA, including requirements for specific denial reasons and public reporting of program metrics. CMS is also requiring that payers provide physicians and patients more PA-related information.

CMS notes enforcement of its policies, particularly around Medicare Advantage payers, can include CMS sanctions and civil monetary penalties. CMS received considerable feedback on the effective date of its policies, including some concerns regarding technology challenges. Unless otherwise noted in the section summaries attached, CMS’ policies will go into effect January 1, 2027.

The AMA issued a press release commending the Biden Administration for its PA reforms that prioritize patients’ access to care and reduce administrative burdens for physicians and their staff. The AMA has been urging the Biden Administration to move forward on many of these reforms and this final rule is an important step. The AMA looks forward to continuing to work with CMS on this critical issue, including expanding these improvements to drug PA.

A more detailed, preliminary summary of the new regulations can is available here.