The Centers for Medicare & Medicaid Services (CMS) Jan. 17 finalized new regulations aimed at reforming the prior authorization process.

The new rule will:

  • Streamline and reduce the burden associated with health plan prior authorization processes.
  • Promote greater transparency into medical necessity criteria.
  • Improve the electronic exchange of health care information.

Overall, the rule will improve patient access to care and help clinicians focus on patient care rather than paperwork, all while saving clinicians an estimated $16 billion over the next 10 years, based on CMS projections.

In this blog, we review the current state of prior authorization and what hospitals and health systems can expect as a result of this new rule.

Current Prior Authorization Landscape

As a result of the significant variability between health plans’ prior authorization service lists and approval criteria, providers often are uncertain whether a particular recommended treatment requires prior authorization and, if so, which documents the plan requires for approval. Currently, obtaining this information requires significant provider and staff time and hassle spent combing through myriad payer websites and policy manuals.

This lack of transparency is a frequent reason that prior authorization and claims are delayed or denied, frustrating patients and their health care providers. Leaving providers in the dark about what documentation they must provide results in extensive back and forth between providers and plans, which only serves to delay care and unnecessarily burden clinical staff with resource-intensive paperwork.

What is more, plans vary widely on how to format and submit prior authorization requests and supporting documentation. While some plans accept electronic means, the most common method remains using fax machines and contacting call centers, with regular hold times of 20 to 30 minutes.

In addition, plans offering electronic methods of submission most commonly use proprietary plan portals, which require a significant amount of time spent logging into a system, extracting data from the provider’s clinical system and completing idiosyncratic plan requirements, thereby reducing the administrative efficiencies of the process. For each plan, providers and their staff must ensure they are following the correct rules and processes, which may change from one request to the next.

What the Final Rule Means for Hospitals and Providers

The requirements finalized in the CMS rule have the ability to alleviate the lack of transparency and varying prior authorization submission methods. In the final rule, CMS requires plans to implement and maintain technology that enables provider electronic health records (EHRs) or practice management systems to:

  1. Ascertain whether prior authorization is required for most items and services (the rule currently excludes drugs).
  2. Query and identify in real time the specific prior authorization rules and documentation requirements for a particular service.
  3. Populate prior authorization forms directly from the provider’s EHR or practice management system.

Process Improvements

This new functionality will eliminate the need for providers to spend significant time combing plan websites and policy manuals to decipher whether a particular item or service requires prior authorization and what documentation is needed for the request. As required by the final rule, plans must enable a provider’s EHR or practice management system to automatically complete that task instantaneously in the provider’s workflow. By requiring a plan to indicate the prior authorization status of a particular service in real time from within the provider’s EHR, this rule will significantly reduce the cost and time spent trying to comply with payers’ ever-changing rules.

Additionally, the final rule requires systems to support the automated compilation of necessary data needed to submit prior authorization requests and requires payers to communicate whether the prior authorization is approved, denied (with specific reason) or requires additional information. This functionality should reduce the time spent transposing information from an EHR into alternative prior authorization forms and help providers to determine the status of prior authorization requests in a timelier manner.

Improving Timeliness Standards

Through incorporating the required electronic standards, prior authorization processes should be more efficient and take less time to process. Therefore, the final rule establishes new timeframes for standard and expedited prior authorization requests.

Specifically, impacted plans, including Medicare Advantage plans, will be required to respond to prior authorization expedited requests no later than 72 hours after receiving a request and no later than 7 calendar days after receiving a standard request. These standards represent a significant step forward in ensuring patients are given the timely care they deserve.

Public Reporting of Prior Authorization Metrics

The final rule requires impacted payers to publicly report metrics annually related to prior authorization. Enhanced reporting of these metrics should improve oversight, including the ability to identify plans that have, or have not, implemented prior authorization reforms in the manner envisioned by the administration.

Taken together, the final rule requirements alleviate the significant variation in prior authorization submission processes, improve transparency and documentation to complete a request, and potentially reduce delays to needed patient care.

Andrea Preisler, AHA Senior Associate Director of Administrative Simplification Policy

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