CMS rule sets deadlines for prior authorizations

By Alison Bennett / January 17, 2024

Health insurance companies and states will have to resolve prior authorization requests more quickly under a final rule the Centers for Medicare and Medicaid Services published Wednesday.

Insurers in the Medicare, Medicaid, Children's Health Insurance Program, as well as health insurance exchange markets and state Medicaid and CHIP authorities must respond to non-urgent prior authorization requests within seven days and to urgent requests within 72 hours.

The final rule's prior authorization speed provisions are unchanged from the proposed rule CMS issued in 2022. The regulation also includes new data standards the agency says will facilitate interoperability for prior authorizations and requires covered entities to disclose prior authorization statistics.

“When a doctor says a patient needs a procedure, it is essential that it happens in a timely manner,” Health and Human Services Secretary Xavier Becerra said in a news release. “Too many Americans are left in limbo, waiting for approval from their insurance company. Today the Biden-Harris administration is announcing strong action that will shorten these wait times by streamlining and better digitizing the approval process.”

The regulation will take effect 60 days after it formally appears in the Federal Register. Insurance companies and states will have to begin complying in 2026.

CMS and Congress have heeded provider complaints that prior authorization demands—and rejections—have proliferated in recent years.

In November CMS published a proposed rule that would require Medicare Advantage insurers to report data on how their prior authorization policies affect people with disabilities, Special Needs Plans members and low-income enrollees who receive Medicare Part D subsidies.

The House passed the Improving Seniors’ Timely Access to Care Act of 2021 two years ago, and the House Ways and Means Committee advanced the measure again last year. The legislation would create an electronic process for handling prior authorizations featuring real-time responses to some commonly requested services, among other provisions.

In the meantime, health insurance companies including UnitedHealth Group, Cigna and Blue Cross Blue Shield of Michigan have relaxed prior authorization rules for some services. UnitedHealth Group and Cigna are both being sued over allegedly employing artificial intelligence tools to automatically deny prior authorization requests, which the companies deny.

The prior authorizations final rule also spells out technical specifications for electronic requests. Starting in 2027, insurers and states will have to use the Health Level 7 Fast Healthcare Interoperability Resources—also called HL7 FHIR—API to process prior authorizations.

Provider groups including the American Hospital Association welcomed the regulation.

"The AHA commends CMS for removing barriers to patient care by streamlining the prior authorization process," President and CEO Richard Pollack said in a news release. "Hospitals and health systems especially appreciate the agency’s plan to require Medicare Advantage plans to adhere to the rule, create interoperable prior authorization standards to help alleviate significant burdens for patients and providers, and to require more transparency and timeliness from payers on their prior authorization decisions."

The Federation of American Hospitals likewise offered support for the regulation while urging Congress to pass the Improving Seniors’ Timely Access to Care Act of 2023. “Patients need protection from arbitrary critical care denials and delays due to insurance company prior authorization abuse," President and CEO Chip Kahn said in a news release.

"The American Medical Association applauds Centers for Medicare and Medicaid Services Administrator [Chiquita] Brooks-LaSure for heeding patients and the physician community in a final rule that makes important reforms in government-regulated health plans’ prior authorization programs for medical services," President Dr. Jesse Ehrenfeld said in a news release.

The health insurance trade group AHIP praised the agency for establishing electronic prior authorization request standards.

"With this rule CMS creates a roadmap for public and private payers in federal programs to work in tandem with providers to put this preparatory work into practice to improve patient access, outcomes, affordability and experience," the association said in a news release. AHIP urged the HHS Office of the National Coordinator for Health Information Technology to require health IT companies to include prior authorization utilities in all electronic health records.