CMS Finalizes Prior Authorization Rule, Limiting the Amount of Time Payers Can Take to Issue Decisions

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On January 15, CMS finalized its rule altering requirements for Medicaid and CHIP fee-for-service programs, Medicaid managed care plans, CHIP managed care entities, and marketplace exchange plans to streamline the prior authorization process. This rule, first proposed on December 10, 2020, was finalized nine business days after the end of its comment period. Although Medicare Advantage and other plans are not required to comply with these requirements, CMS stated that other plans may voluntarily adopt the requirements, with the requirements for Medicaid, CHIP, and QHP issuers serving as a foundational experience. The final rule requires the specified payers to permit third-party applications to retrieve, with approval from the current beneficiary or enrollee, data on adjudicated claims, encounters with health care providers, and clinical data maintained by the payer. This rule aims to allow patients access to their information that may be scattered across other platforms. In addition, payers will be required to provide the same access to providers who can then incorporate it into their electronic health records or practice management system. Furthermore, payers must revise their prior authorization processes to ensure expediated requests are resolved within 72 hours, while standard requests are resolved within seven days. Overall, this rule aims to reduce the burden on patients by providing additional information and clarity through data sharing and quicker processing. However, some providers have noted that this rule may fall short of its goals due to the burden on providers. Namely, providers will face financial and time barriers in implementing these new data sharing options into their existing technology, and, due to the exclusion of a significant number of plans, may not have the financial incentives to adopt the new technology. Read the final rule here.

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