By Sanja Zivkovic, PharmD, MPH, Strategic Planning Director, Mosaic
Payers implement prior authorization (PA) requirements with the intent to ensure medical necessity for treatments, lower healthcare costs and promote value-based care. However, providers and health systems argue the increasingly complex process has placed an unnecessary burden on their practices and negatively impacts patients’ access to care.1 In a recent American Medical Association (AMA) survey of 1,001 physicians, 88% described the burden associated with PAs as high or extremely high for their practice, spending approximately 14 hours per week to complete an average of 45 PAs per physician. Furthermore, 94% reported a delay in care as a result of PAs and 89% perceive the PA process has had an overall negative impact on clinical outcomes.2
Some states (e.g., Michigan, Pennsylvania, and Texas) have already taken steps to ameliorate PA requirements and streamline the process, with up to 42 states looking to introduce bills aimed at changing the PA process in 2023.3 The recent Centers for Medicare and Medicaid Services (CMS) proposed rule titled Advancing Interoperability and Improving Prior Authorization Processes builds on existing state legislation to expand the initiative at a federal level.4,5
Overview of the proposed prior authorizations rule
In December of 2022, CMS proposed a new rule aimed at streamlining processes related to PAs and improving the electronic exchange of healthcare data between payers, providers and patients.4,5 It is estimated that this rule, which has gained general support by both providers and payers, would save hospitals and physician offices more than $15 billion over 10 years, reduce provider burden and improve patient care and experience.4,5,6 The rule would apply to Medicare Advantage (MA) organizations, state (FFS) and managed care programs for Medicaid and CHIP, as well as the ACA exchanges. Comments on the proposed rule were due March 13, 2023, and if finalized, the rule would take effect in January 2026.4
Key Provisions of the Proposed Rule*4,5,7:
1. Streamline the PA process:
- Payers must have/build an automated process and interface (API) for providers to determine whether a PA is needed, identify documentation requirements and facilitate the PA process electronically (i.e., integrating PA process within existing EHR workflow)
- Payers must provide rationale for denied requests to providers
- Payers are required to send PA decisions within 72 hours for urgent requests, and within 7 calendar days for non-urgent requests, which is twice as fast as the existing non-urgent MA response time limit
- Turnaround time in the final rule could be even shorter: 48 hours for urgent requests and 5 calendar days for standard requests
- Required public reporting of PA metrics by payer organizations, including overall aggregate approval and denial rates (with or without appeals) and average and median turnaround time of PA decisions
2. Standardize data exchange processes:
- Payers must have/build systems to allow electronic sharing of patient data with in-network providers and with other insurers when a patient switches to a new health plan or has multiple plan coverage
- Payers must provide information to patients about their PA decisions via the patient access API to help patients better understand the PA process and its impact on their care
3. Request for more information from the public on the following:
- Improving medical documentation exchange between and among providers, suppliers and patients in traditional Medicare
- Standards for social risk factor data, exchanging behavioral health information electronically and how interoperability and PA process improvement can improve maternal health outcomes
Implications of the proposed prior authorizations rule
Patients and providers
The automation of the PA process will require providers and health systems to build the required IT infrastructures in order to adopt electronic PA processes. While this will require significant upfront investment, health systems are incentivized by the potential to reduce the administrative burden on their staff, receive more timely decisions from payers and the Medicare quality measures that will be linked to implementation of the proposed rule provisions. The new electronic PA process also means providers and health systems will need to provide adequate training for staff to ensure a seamless transition to the new workflow. Ultimately, and most importantly, the proposed PA rule should allow for quicker access to therapies for patients through streamlined electronic processing of PA requests and shorter turnaround time by payers.
The proposed PA rule would lead to significant automation of the PA process, saving payers administrative time and resources. The new electronic process may also allow payers to propose alternate therapies that do not require a PA to providers through the automated PA process, facilitating quicker access to care for patients. Similar to providers and health systems, payers will also need to make significant investments to build the required IT infrastructure and establish internal processes to ensure compliance with the proposed rule. The public reporting of PA metrics by organization would also ideally encourage consistency in PA approval rates amongst payers, given public visibility of benchmarks available for comparison.
The proposed updates to the PA process present an opportunity for manufacturers to partner with health systems and provide training and resources to support office staff and providers in navigating the new electronic PA process, including establishing best practice guidelines and standard operating procedures (SOPs) for their organizations. Manufacturers will also need to ensure that provider and office staff resources that support PA requests for their brands are updated to reflect these new electronic and automated processes for applicable patient populations. Lastly, manufacturers will need to track the potential for growing payer influence through the new automated PA process.
The provisions in this proposed CMS rule have the potential to streamline the PA process, reduce administrative burden for providers, office staff and payers, and most importantly accelerate access to therapies for patients. Stay tuned for an update on the final CMS rule in Q4 2023.
*This information has been summarized. The full CMS Proposed Rule can be found at [Medicare and Medicaid Programs; Patient Protection and Affordable Care Act.]