The Centers for Medicare and Medicaid Services (CMS) has finalized the CMS Interoperability and Prior Authorization Rule, a move that is expected to streamline the prior authorization process and save approximately $15 billion over the next decade.
This rule applies across the board to Medicare Advantage organizations, Medicaid, the Children’s Health Insurance Program (CHIP) fee-for-service programs, Medicaid managed care plans, CHIP managed care entities, and issuers of Qualified Health Plans offered on the Federally-Facilitated Exchanges.
From 2026, imperative payers will need to conduct prior authorization decisions within 72 hours for urgent requests and a maximum of seven days for non-urgent requests. This significantly reduces non-urgent prior authorization decision timelines by half for some payers. Payers are also mandated to provide clear reasons for any denials of prior authorization requests.
Health and Human Services Secretary Xavier Becerra stressed the importance of timely medical procedures, highlighting the rule’s contribution towards shortening wait times. The rule aims to achieve this by improving digitization and streamlining the approval process.
In addition, the rule requires payers to implement the Health Level 7 Fast Healthcare Interoperability Resources Prior Authorization application programming interface (API), thereby fostering a more streamlined electronic prior authorization process between providers and payers.
CMS is also finalizing API requirements to increase health data exchange and promote a more efficient health care system. Compliance dates for this policy have been delayed from January 1, 2026, to January 1, 2027. From this date, payers will also be obliged to expand their current Patient Access API to include information about prior authorizations and create a Provider Access API for providers to access their patients’ claims, encounters, clinical, and prior authorization data.
Under this rule, a new electronic prior authorization measure for eligible clinicians will be rolled out under the Merit-based Incentive Payment System Promoting Interoperability performance category. The same measure will be in place for eligible hospitals and critical access hospitals as part of the Medicare Promoting Interoperability Program.
A number of organizations have expressed approval of this newly finalized rule, including the American Hospital Association (AHA). Rick Pollack, president and CEO of AHA, praised the rule for addressing a practice which has often led to dangerous treatment delays and clinician burnout. The Better Medicare Alliance also voiced their support.
Further details of this development can be found in the MedCityNews article.