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Prior authorization, a practice that APTA and other organizations have long criticized as burdensome and frequently abused, could be seeing some significant reforms if a proposed rule from the U.S. Centers for Medicare & Medicaid Services is adopted next year. The far-reaching rule would require significant improvements in transparency and could dramatically streamline the prior authorization process across multiple plans that involve federal funds.

The breadth of the proposal is a welcome surprise. While some observers expected CMS to forward changes to prior authorization in Medicare Advantage, the proposed rule goes well beyond that program, targeting not only MA but state Medicaid and Children's Health Insurance Plan fee-for-service programs, Medicaid managed care plans, CHIP managed care entities, and Qualified Health Plan issuers in the federal ACA insurance exchanges. Those plans were included in a 2020 prior authorization proposed rule that CMS says is being replaced by this more comprehensive approach, most of which is proposed to take effect in 2026.

In a CMS press release, the agency described the proposed rule as an effort to strengthen patient access to care, stating it "would streamline the prior authorization process and promote health care data sharing to improve the care experience across providers, patients, and caregivers — helping us to address avoidable delays in patient care and achieve better health outcomes for all." The agency has also produced a fact sheet that includes highlights from the proposed rule.

APTA strongly supports the proposed rule and will provide comments by the March 13, 2023, deadline. Be on the lookout for opportunities to add your voice to the call for this much-needed change after the new year. The association will continue to advocate for additional legislation similar but separate to this proposed rule that would improve prior authorization in Medicare Advantage, known as the Improving Seniors' Timely Access to Care Act (H.R. 3173/S. 3018). That legislation has passed in the House and is awaiting Senate action.

The Heart of the Proposed Rule: Application Programming Interfaces

Much of the CMS' strategy for reform centers on the refinement — and in some cases, creation — of various "application programming interfaces," aka APIs, basically the online portals that allow payers, patients, providers, and third-party administrators to share and access information.

For providers: a significantly streamlined prior authorization process, and wider access to information. Under the proposed rule, payers would be required to create two provider-facing APIs — one that would establish an automated approach to prior authorization that could significantly reduce wait times and increase transparency around decisions, and a second that would make it easy for providers to access patient data.

The new prior authorization API could pave the way for significant improvements by requiring payers to meet three specific mandates: an automated process for providers to find out if authorization is even needed, clarity on documentation required of providers and support systems for automated compilation of data from the provider, and an automated approach to compiling prior authorization information that includes the specific reasons for a denial. Standard timelines would also be put in place requiring decisions on urgent requests within 72 hours and on standard requests within seven business days.

The second required API would allow providers in a payer's network to request patient information. Providers would also have access to claims and encounter data, procedures, assessments, and treatment plans (assuming the payer has the information). The provider API would also require payers to share information on prior authorization requests and decisions, including related documentation. Payers would need to share requested data no later than one business day after a request is made.

For patients: CMS wants to make the patient-facing APIs easier to use and more robust. The agency already requires payers to make their APIs available to patients in a variety of easy ways, including through various health apps. As with the provider API, the proposed rule pushes transparency even further by expanding patient-accessible information to include prior authorization requests and decisions, with API updates required no later than one business day after the payer receives a request or a status change is made.


In terms of prior authorization information available to patients, payers would be required to include the date the prior authorization was approved or denied, the date or circumstance under which the authorization ends, the items and services approved, and the quantity used to date under the authorization. Patients would also be able to access any materials that the provider sends to the payer to support a decision. Should a payer deny a request, patients would have to be provided a specific reason for the denial. The decision requirements would apply to physical therapy and all other areas except prior authorization related to drugs.

A Win With Long-Term Effects

Kate Gilliard, JD, APTA director of health policy and payment, says that the proposed rule has the potential to address serious near-term problems with prior authorization and to set the stage for even more improvements down the road.

"APTA advocated for these specific fixes in our response to a request for information on Medicare Advantage, so we're of course very happy to see this level of progress," Gilliard said. "There will be significant benefits when this rule is implemented, particularly around turn-around times for plans to make decisions and the automated process for submitting requests. Administrative burden is becoming a critical practice issue, and it's good to know CMS is listening."

Gilliard sees another benefit: The establishment of robust APIs opens the potential for more extensive data collection on prior authorization, which could give advocates for decreased administrative burden more leverage in the future.

"A lot of data will be gleaned once this rule is implemented," Gilliard said. "That means we'll have a better understanding of denial rates and the reasons behind them, which we already know are often not based on science or best practice. We're very much looking forward to that aspect of the rule — the impact that data will have."

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