CMS proposes rule to improve prior authorization processes

December 13, 2022

The Centers for Medicare and Medicaid Services (CMS) recently released a proposed rule that would streamline prior authorization processes for certain payors. The proposed rule would require electronic prior authorization processes, shorten the time frames to respond to prior authorization requests, publicly report certain prior authorization metrics and establish policies to make the prior authorization process more efficient and transparent.

These proposed requirements would generally apply to Medicare Advantage 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. CMS estimates that efficiencies introduced through these policies would save physician practices and hospitals over $15 billion over a 10-year period.

The proposed rule largely aligns with the Improving Seniors’ Timely Access to Care Act (S. 3018/S.R. 3173), legislation that is strongly supported by the California Medical Association and unanimously passed the U.S. House of Representatives in September.

Most notably, the rule and the bill both:

  • Seek to reduce care delays and improve patient outcomes;
  • Aim to advance interoperability and improve prior authorization processes by requiring MA plans to adopt electronic prior authorization (E-PA);
  • Ensure MA plans respond to prior authorization requests within specific timeframes;
  • Require public reporting on the use of prior authorization with specific and detailed transparency on MA prior authorization;
  • Support efforts to waive or modify prior authorization requirements based on provider performance; and
  • Acknowledge that health plans’ proprietary interfaces and web portals through which providers submit their requests remain inefficient and burdensome.

Furthermore, the proposal and the bill also closely align with the stated rationale for improving prior authorization processes. Both the rule and the bill acknowledge that prior authorization:

  • Plays an important role in utilization management, but it can be misused or overused, creating considerable challenges for patients, providers, and payers;
  • Presents a serious health risk for patients when care is delayed;
  • Increases provider and payer burden due to inconsistent payer policies, provider workflow challenges, and unpredictable use of electronic standards; and
  • Contributes to significant provider burnout.

The associated cost estimate of the legislation from the Congressional Budget Office (CBO) was $16 billion. The timely release of this rule will help to reduce the CBO score and help to move the bill through the Senate and signed into law this year. CMA continues to advocate for its final passage.

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