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Could Proposed CMS Prior Authorization Rule Reduce Provider and Patient Burdens?

Analysis  |  By Mandy Roth  
   December 11, 2020

New rule is designed to streamline processes and improve access to patient records; implementation could save between $1 to $5 billion.

Prior authorization is an acknowledged source of frustration for providers and patients, creating administrative hassles and sometimes causing delays in care. In an initiative that builds on the Interoperability and Patient Access final rule published in May, The Centers for Medicare & Medicaid Services (CMS) has issued a proposed rule that would improve the electronic exchange of healthcare data among payers, providers, and patients, and streamline processes related to prior authorization.

"By both increasing data flow, and reducing burden, this proposed rule would give providers more time to focus on their patients, and provide better quality care," according to a news release issued by CMS.

CMS cites the COVID-19 pandemic as an impetus behind the action, which it says has demonstrated the impact of inefficiencies in the healthcare system, including lack of data sharing and access, making it difficult for patients to navigate care.

"Prior authorization is not only a leading source of burden, it is also a primary source of provider burnout, and takes time away from treating patients," said CMS Administrator Seema Verma. "If just a quarter of providers took advantage of the new electronic solutions that this proposal would make available, the proposed rule would save between 1 and 5 billion dollars over the next ten years. With the pandemic placing even greater strain on our health care system, the policies in this rule are more vital than ever."

The Office of the National Coordinator for Health IT (ONC) is also proposing to adopt certain standards through a U.S. Department of Health and Human Services rider on the CMS proposed rule.

Among the advantages CMS says the proposed rule would address:

  • The ability to improve quality of care and lower costs
  • Offer payors and providers access to complete patient histories
  • Improved patient access to health information
  • Reduction of unnecessary care

"Prior authorization is a necessary and important tool for payors 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," Verma said.

These objectives would be accomplished by building application programming interfaces (APIs) between Medicaid, CHIP, and QHP programs—and third-party apps—which facilitate the electronic exchange of data.

According to the news release, payers would be required to implement and maintain these APIs using the Health Level 7 (HL7) Fast Healthcare Interoperability Resources (FHIR) standard, "an innovative technology solution that helps bridge the gaps between systems so both systems can understand and use the data they exchange."

This new proposed rule builds on earlier work completed by the administration, including the Interoperability and Patient Access rule that was finalized this spring.

"Whereas our earlier rule focused on getting health data into the hands of patients," Verma wrote in a blog  post yesterday, "today’s rule is distinctive and groundbreaking because it greases the data exchange wheels between different payers, as well as between payers and providers. This will close the loop on data sharing, ensuring that all parties—patients, payers, and providers alike—have ready access to patient data."

The comment period on the proposed rule ends January 4, 2021. More information is available on the CMS website and in a fact sheet.

“This will close the loop on data sharing, ensuring that all parties—patients, payers, and providers alike—have ready access to patient data.”

Mandy Roth is the innovations editor at HealthLeaders.


The rule aims to improve quality of care, lower costs, reduce unnecessary care, and enhance access to patient records.

Application programming interfaces (APIs) between Medicaid, CHIP, and QHP programs—and third-party apps—will facilitate the electronic exchange of data.

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