In mid-December 2020, the Centers for Medicare and Medicaid Services (CMS) published a proposed rule to address prior authorizations and attempt to reduce the burden on patients and providers. The proposal focuses on standardizing and improving the prior authorization process, which requires that a physician get prior approval from an insurance company for a particular medication or treatment before administering it by improving the electronic exchange of health data.

If the rule were to be finalized as proposed, it would require payers to build and maintain standardized application programming interfaces (APIs) for payer-to-provider and payer-to-payer sharing of health data – including prior authorization data.

In the proposed rule, in addition to the five proposals made, CMS included five requests for information, including:

  1. Methods for enabling patients and providers to control sharing of health information
  2. How to advance electronic data exchange among behavioral health providers
  3. Input on processes and uses of electronic prior authorization transactions exchanged between payers, providers and patients
  4. How CMS can reduce the use of fax technology across all programs
  5. Information on barriers to adopting standards and opportunities to accelerate the adoption of standards related to social risk data.

The rule was proposed on December 10, 2020 but was not published in the Federal Register until December 18, 2020, which left only 17 days for review of the draft proposal and submission of comments. Of those 17 days, two were federal holidays and six were weekend days.

Provider and Hospital Groups Cheered the Proposal

As might be expected, provider and hospital groups largely supported the proposal, calling for more strict requirements for payers. However, even the American  Hospital Association (AHA) spoke out about its disappointment that Medicare Advantage (MA) plans were not included in the proposed rule, saying, “The notable exclusion of MA plans is extremely troubling and significantly reduces the potential impact of the regulation.”

Provider groups, including the AHA, also wrote in to opine that the proposed rule was too “lenient” and would give payers too much time to review a prior authorization decision – 72 hours for “urgent needs” and up to seven days for standard requests. AHA would like to see those timelines reduced in a final rule, to 24 and 72 hours, respectively.

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Payer Groups Spoke Out in Force Against the Proposed Rule

However, payer groups slammed the proposed rule, arguing that the comment period was far too short (perhaps even illegally so) and that the effective dates were not realistic. They also argued that the rule would actually put a greater burden on the overall health care system that was still processing COVID-19 changes.

“Introducing substantial additional requirements and demands in an environment already facing significant resource constraints and limited time for implementation risks distracting from the crucial fight against the pandemic as we enter a key phase in defeating COVID-19,” Matt Eyles, CEO of America’s Health Insurance Plans, said in response to the rule.

Eyles also took issue with the short review and comment period, saying, “To our knowledge, this Proposed Rule has the shortest comment period for any proposed rule of this scope and complexity proposed by CMS during the term of the current Administration,” and asked for an additional 45 days to review the rule.

Ceci Connolly, CEO of the Alliance of Community Health Plans, also took issue with the short review and comment period, saying that in order to issue informed and accurate comments as to whether the proposal is truly viable, payers need to evaluate existing processes and pull data from their provider partners, and such a short comment period doesn’t allow for that.

The American Medical Association (AMA) also submitted a comment in response to the proposal, saying, “Absent modifications to this initial testing phase, we have concerns that this proposal will fail to achieve its goals due to insufficient participation, will confuse payers about their obligations, will inadvertently increase burden on physician practices, and will fall short of providing patients with access to meaningful information about their health care.”

What’s Next?

The rule was finalized on January 15, 2021, but President Joe Biden has asked for agencies to review last-minute actions taken by the Trump Administration to determine whether his Administration will overturn them. It remains to be seen whether this rule will be one that is reviewed, reversed, and/or otherwise modified by the Biden Administration in the coming months.

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