AMARILLO, TX – On December 2, 2020, CMS issued a proposed rule designed to (i) improve the electronic exchange of health care data among payers, providers, and patients and (ii) lessen the burden of current prior authorization practices. “Prior Authorization” refers to the process by which a provider must obtain approval from a payer before providing care and prior to receiving payment for delivering items or services. This is sometimes referred to as “pre-authorization” or “pre-claim review.”
Prior authorization requirements are established by payers with the stated goal of controlling costs and ensuring payment accuracy by verifying that an item or service (i) is medically necessary, (ii) meets coverage criteria, and (iii) is consistent with standards of care before the item or service is provided—rather than undertaking that review for the first time when a post-service request for payment is made.
The proposed rule is designed to enhance certain policies from the CMS Interoperability and Patient Access final rule and adds several new proposals designed to increase data sharing and reduce overall payer, provider, and patient burden through proposed changes to prior authorization practices. [In the Interoperability and Patient Access final rule (CMS-9115-F), CMS finalized its policy to require a select group of CMS-regulated payers to implement a Fast Healthcare Interoperability Resources (FHIR)-based Patient Access API.]
Under the proposed rule, payers in Medicaid, CHIP (Children’s Health Insurance Programs), and QHP (Qualified Health Plan) programs would be required to create application programming interfaces (APIs) to support data exchange and prior authorization. Payers would then have to implement and maintain these APIs using the Health Level 7 Fast Healthcare Interoperability Resources standard (FHIR), a technology tool designed to help bridge the gaps between systems so that both systems can understand and use the data they exchange. So, generally, the APIs built by the payers will allow two systems, or a payer’s system or third-party app, to communicate and share data electronically. The Office of the National Coordinator for Health IT is also proposing to adopt certain standards through an HHS rider on the proposed CMS rule.
The proposed rule would make substantial changes designed to improve the patient experience and reduce some of the administrative burden that prior authorization causes for health care providers. Additionally, the rule is designed to lower the amount of time providers wait to receive prior authorization decisions from payers, proposing a maximum of 72 hours for payers to issue decisions on urgent requests and seven calendar days for non-urgent requests. To increase transparency, payers would be required to provide a specific reason for any denial.
To promote accountability for plans, the rule requires the plans to make public certain metrics that demonstrate how many procedures they are authorizing. These policies, taken together, are designed to lead to fewer prior authorization denials and appeals while improving communication and understanding between payers, providers, and patients.
The proposed changes would also allow payers, providers, and patients to have access to more information including pending and active prior authorization decisions, potentially allowing for fewer repeat prior authorizations, reducing burden and cost, and ensuring patients have better continuity of care. The above prior authorization polices are proposed to take effect January 1, 2023.
CMS stated that, “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. 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 comment period for the Proposed Rule closes on January 4, 2021.
Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato, a law firm with a national health care practice based in Texas. He represents pharmacies, infusion companies, HME companies, manufacturers, and other health care providers throughout the United States. Mr. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization and can be reached at (806) 345-6320 or email@example.com.
Monique A. Peña, JD, is an attorney in the Health Care Group at Brown & Fortunato, a law firm with a national health care practice based in Texas. She represents pharmacies, home health agencies, HME companies, and other health care providers throughout the United States. Ms. Peña can be reached at (806) 345-6316 or firstname.lastname@example.org.