CMS Releases Prior Authorization Final Rule Requiring Payers to Provide Decisions Within Three to Seven Days

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ACP believes the required time frame should be even shorter; is advocating for legislation that would advance reforms directly impacting prior authorization processes

Feb. 9, 2024 (ACP) -- The Centers for Medicare & Medicaid Services has finalized new regulations that require payers to make prior authorization decisions within 72 hours for expedited requests and within seven calendar days for standard, nonurgent requests.

For some payers, this new time frame for standard requests will cut the current decision time frames in half. However, ACP believes these provisions do not go far enough to protect patients and ease the burden on physicians. As a result, ACP continues to push for federal legislation that requires the prior authorization process to happen even more quickly.

"There is still some work to be done," said Dejaih Johnson, ACP regulatory affairs manager. "Congress must pass the bipartisan legislation known as the Improving Seniors' Timely Access to Care Act. It's critical to advance reforms that directly impact prior authorization processes for private insurers and for medications."

The new requirements from CMS were released in January. They will apply to Medicare Advantage (MA) organizations, state Medicaid and Children's Health Insurance Program agencies, Medicaid managed-care plans and qualified health plan insurers on the federally facilitated exchanges.

The regulations also require specific payers to give patients and physicians a reason for denying a prior authorization request. And the rules would require these payers to provide details on how to resubmit the request or appeal the decision.

Payers must also report specific prior authorization metrics and implement a Health Level 7 (HL7) Fast Healthcare Interoperability Resources standard application programming interface (API) to support a better, more efficient electronic automation process. "These reforms directly result from ACP's advocacy, its continued participation in HL7 and College-wide efforts to leverage health information technology to address administrative burdens," Johnson noted.

The reforms are good news because they provide for metrics, transparency and accountability, according to Johnson. "They will save lives and result in massive savings," she said. "The Department of Health & Human Services expects the changes will result in approximately $15 billion in savings over 10 years by reducing the health care system's administrative burden and improving health outcomes."

ACP is proud to have shared information with regulators and congressional representatives about the current prior authorization system's many problems. "Current practices stress the health care system and are used by payers to not cover costly procedures and treatments as quickly as patients need," Johnson said. "Countless studies have documented that prior authorization is the No. 1 cause of physician burden, forcing them to divert significant amounts of time and focus away from patient care. While touted as a cost-savings or cost-containment mechanism from insurers, prior authorization leads to significant waste, as the process commonly leads to either diversion to ineffective initial treatments or additional office visits."

But ACP is not done advocating for change. ACP prefers shorter time frames: 24 or 48 hours for urgent requests and five calendar days for nonurgent requests. Unfortunately, CMS declined to go this far.

Additionally, "the College strongly believes health information technology can and should be an integral tool in reducing burden, including sharing valuable and meaningful information and streamlining processes," Johnson said. "We further urged CMS to consider instances where the drain on resources from prior authorization could be avoided from the outset and to consider opportunities for related rulemaking."

Various provisions in the final rule are set to take effect at different times. "Starting in 2026, CMS will require health plans to send prior authorization decisions within three days for urgent requests and seven days for standard requests," Johnson said. "Beginning in 2027, payers will be expected to have a prior authorization API, expand on its patient access API and implement a physician (or provider) access API."

Johnson said Congress must pass the Improving Seniors' Timely Access to Care Act. "Reforms that directly impact prior authorization processes for medication and private insurers are critical," she said. "A Department of Health & Human Services report shows detailed abuse in the prior authorization process: MA insurers sometimes delay or deny beneficiaries access to services and medications even though the requests meet Medicare coverage rules."

The House approved the legislation in 2022. "The Senate and House have since been working with CMS to advance this legislation, but the bill's cost has been a factor," Johnson explained. "CMS's reform efforts are immensely appreciated, but we must extend these reforms to drug prior authorization."

She added that state efforts are another important part of the prior authorization picture. The ACP state governmental affairs team and grassroots advocacy network have diligently been tracking numerous state-led efforts to address the harm caused by prior authorization. Dozens of states have either introduced or adopted comprehensive prior authorization reforms. In addition, some states have also made progress in the private sector.

"The College strongly believes that public and private payers must follow a unified process to address prior authorization requests," Johnson said. "Any variation will create too much confusion and additional work for already severely overburdened clinicians. ACP continues to urge federal action to simplify the prior authorization process to determine if a prescribed procedure, service or -- importantly -- medication is covered by a health plan in Medicare."

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