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CMS' Proposed Prior Authorization Rule Applauded by Groups

Analysis  |  By Jay Asser  
   December 08, 2022

The rule aims to streamline the administrative process by requiring certain payers to implement electronic prior authorization.

Medical associations and payer groups are reacting approvingly to CMS' proposed rule which would require Medicare Advantage (MA) plans and other payers to implement electronic prior authorization.

The rule is part of the Biden administration's initiative to increase health data exchange and investing in interoperability, CMS announced. It would apply to MA organizations, state Medicaid and Children's Health Insurance Program (CHIP) agencies, Medicaid managed care plans, CHIP managed care entities, and Qualified Health Plan Issuers on the Federally-facilitated Exchanges.

"The prior authorization and interoperability proposals we are announcing today would streamline the prior authorization process and promote health care data sharing to improve the care experience across providers, patients, and caregivers – helping us to address avoidable delays in patient care and achieve better health outcomes for all," said CMS administrator Chiquita Brooks-LaSure.

The proposed rule would require the implementation of a Health Level 7 Fast Healthcare Interoperability Resources standard Application Programming Interface to support electronic prior authorization, payers to give a reason when denying requests, publicly reporting certain prior authorization metrics, and sending decisions within 72 hours for expedited requests and seven calendar days for standard requests—twice as fast as the existing MA response time limit.

CMS stated that the rule would save providers more than $15 billion over a 10-year period.

The response to the rule from both provider and payer groups has been positive, ranging from the American Hospital Association (AHA) to MA advocacy group Better Medicare Alliance (BMA).

AHA: "The AHA commends CMS for taking important steps to remove inappropriate barriers to patient care by streamlining the prior authorization process for some health insurance plans. Hospitals and health systems especially appreciate that CMS included Medicare Advantage plans in these requirements, as the AHA has urged. Prior authorization is often used in a manner that results in dangerous delays in care for patients, burdens health care providers and adds unnecessary costs to the health care system."

Medical Group Management Association: "MGMA is encouraged to see that CMS heeded our call to include Medicare Advantage plans in the scope of this proposed rule. An alarming number of medical groups report completing prior authorization requests via paper forms, over the phone, or through varying proprietary online payer portals. The onerous methods of completing these requests, coupled with the increasing volume is unsustainable. An electronic prior authorization program, if implemented appropriately, has the potential to alleviate administrative burden and allow practices to reinvest resources in patient care. This is a positive step forward for both medical groups and the patients they treat."

America's Health Insurance Plans: "AHIP's Fast PATH demonstration showed that electronic processes for prior authorization are essential for ensuring that patients receive swift, evidence-based care that improves value and reduces administrative burdens for everyone. This proposed rule would require clinicians and hospitals to adopt electronic prior authorization to meet certain quality measures, ensuring that we are all incentivized to work together for a better patient and clinician experience that improves satisfaction, efficiency, and affordability for everyone."

BMA: "Better Medicare Alliance thanks CMS for their leadership in modernizing the prior authorization process for beneficiaries. While we continue to review the proposed rule in closer detail, we believe it complements our goals of protecting prior authorization's essential function in coordinating safe, effective, high-value care while also building on the Medicare Advantage community's work streamlining this clinical tool to better serve its 30 million diverse enrollees. We additionally welcome the proposed rule's data exchange provisions, which will further improve communication between health plans, providers, and beneficiaries."

Jay Asser is the contributing editor for strategy at HealthLeaders. 


The prior authorization rule would require the implementation of a Health Level 7 Fast Healthcare Interoperability Resources standard Application Programming Interface and cutting down on response times for decisions.

Provider and payer groups alike have supported the rule, ranging from the American Hospital Association to Medicare Advantage advocacy group Better Medicare Alliance.

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