CMS Finalizes Rule for Interoperability and Prior Authorization

Last week, the Centers for Medicare & Medicaid Services (CMS) finalized a rule that advances federal efforts toward interoperability.  Through this rule, “impacted payers” of health plans designed by CMS – including, but not limited to, state issuers of Medicaid and Children’s Health Insurance Program (CHIP) Fee-for-Service programs, Medicare Advantage organizations, and Qualified Health Plan issuers on Federally Facilitated Exchanges – are required to implement and maintain application programming interfaces.  Also known as APIs, these interfaces are relied on by the federal government to uphold global standards for the electronic exchange of health care information.  Beginning in 2026, impacted payers will also be required to streamline their processes for prior authorization (PA), a common practice of insurance organizations that requires providers to get advanced approval before delivering a service to patients.  They must send authorization to providers within 72 hours for urgent requests, and within seven calendar days for non-urgent requests.  Beginning in 2027, impacted payers must implement an approved application programming interface for prior authorization, where providers can access the list of covered items and services and get support with their requests. Additionally in 2027, hospitals, including Critical Access Hospitals, and Merit-based Incentive Payment System (MIPS) eligible clinicians will have to attest to using this electronic interface to submit PA requests as part of their Medicare Promoting Interoperability Program reporting requirements. While the use of various electronic exchange methods among hospitals and physicians has increased in recent years, the Government Accountability Office (GAO) recently found that use among small and rural hospitals is lower than that of other hospitals.  Federal officials and other stakeholders told GAO that these and other federal provisions could be helpful for small and rural providers because it could make the exchange of data less costly.

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