MM Curator summary
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[MM Curator Summary]: More details on the proposed rule to increase what payers (mostly plans) need to do around prior auth.
Clipped from: https://www.jdsupra.com/legalnews/cms-proposed-rule-seeks-to-provide-1575175/
On 13 December 2022, the Centers for Medicare and Medicaid Services (CMS) published CMS-0057-P (the Rule),1 a proposed rule that, if adopted, will place new requirements on a number of entities, including Medicare Advantage (MA) organizations, state Medicaid fee-for-service programs, Medicaid managed care plans, and Qualified Health Plan (QHP) issuers on the Federally-facilitated Exchanges.2 The rule is an effort by CMS to “improve the electronic exchange of healthcare data and streamline processes related to prior authorization, while continuing CMS’ drive toward interoperability in the healthcare market.”3 CMS envisions that the proposed rule will “play a key role in reducing overall payer and provider burden and improving patient access to health information.”4 The comment period for the proposed rule closes on 13 March 2023. If adopted, the key components of the Rule would go into effect in 2026.5
Improved Prior-Authorization Processes
Of particular relevance to hospital and physician provider clients, the Rule seeks to improve prior- authorization processes to streamline prior-authorization submissions and decisions between providers and payers. The prior-authorization process allows providers to request approval from payers for coverage of specific medical treatment, including elective surgeries and inpatient-level-of-care admissions, in advance of the treatment. Payers typically require health care providers to obtain prior authorization for elective treatment and inpatient hospital treatment to confirm that the treatment is both covered by the payer and medically necessary. However, the prior- authorization process is often burdensome, requiring providers to determine whether specific services require preauthorization and the requirements of that process across varying systems. The requirements for each payer are also often different. For example, one payer might require submission of documents via fax where another requires medical records sent via CD. These document submission requirements often involve repeated follow-up by providers to confirm receipt or, if documents do not reach the intended recipient, resubmissions. As CMS’ own guidance explains, requiring health care providers to undertake onerous prior-preauthorization procedures can risk patient health when inefficiencies cause a delay in care.6 It also forces providers to expend their thin resources parsing varying documentation, submission, and approval requirements. These inefficiencies can result in unnecessary out-of-pocket payments from patients, or even abandonment of treatment if prior-authorization delays persist. Through the proposed rule, CMS hopes to “alleviate some of the burden of prior authorization processes and to improve the patient experience” in order to provide efficiency and transparency to the prior-authorization process.7
For example, the rule would require payers to set up new software systems specific to prior authorizations. The previously finalized Interoperability and Patient Access Rule, 85 Fed. Reg. 25510 (codified at 42 C.F.R. 406), required impacted payers to implement a Patient Access Application Programing Interface (API). Building off of the Patient Access API, the proposed rule would require payers to build and maintain a Prior Authorization Requirements, Documentation and Decision (PARDD) API, create efficiencies through automation of the processes for providers to determine whether a prior authorization is required, easily ascertain any documentation requirements for the prior authorization, and enable the interchange of prior authorization requests and decisions between a provider’s electronic health records system and the PARDD API.8 All providers would be able to electronically submit requests for prior authorization to impacted payers. Notably, covered entities under the Health Insurance Portability and Accountability Act must use a specifically adopted, current standard for prior authorization transactions. The proposed rule would not modify or impact that standard.9
Importantly, to better facilitate payer and provider transparency, the rule would require payers to identify a specific reason when denying a prior authorization request.10 Payers would also have to publicly report some prior authorization metrics by publishing them annually on the payer’s website.11 This data would be “compiled from multiple sources, on multiple measures and individuals,” in the hopes that the data’s availability would further promote consumer transparency.12 Among other categories, the rule would require payers to report a complete list of all items and services requiring preauthorization, the approval and denial percentages of standard and expedited prior-authorization requests aggregated by item and service, the percentage of approvals after appeal, and the average time between submission and determination.13 These requirements should help foster greater efficiency in the claim appeal process and also provide benchmarks for analysis of appropriate documentation required by providers in order to support medical necessity and avoid denials for certain medical services.
The rule would also set timeframes for certain payers to provide prior authorization decisions. Payers would have 72 hours to render a decision on an urgent submission, and seven calendar days for nonurgent requests.14 Though these timeframes are proposed under the rule, CMS is also currently seeking comment on shorter timeframes (e.g., 48 hours for expedited requests and five calendar days for standard requests).15
In addition to creating preauthorization efficiencies, the Rule also seeks to impose a series of varying requirements for patient data sharing of patient health information among payers to decrease the burdens of patient data submissions by patients and providers throughout a patient’s health care journey. For examples, the rule, if adopted, will require payers to electronically transfer a patient’s health data, with permission, to that patient’s new health plan as a patient changes plans and require payers to share quarterly patient data where patients have concurrent coverage with two or more payers.16
While the comment period closes in March of 2023, the proposed rule, if adopted, would not take effect until early 2026. Though the date may seem distant, the rule has the potential to simplify and modernize some otherwise archaic and onerous prior-authorization procedures. Providers will no longer have to guess whether certain services require preauthorization, will be able to better determine medical necessity of services, and more efficiently and, hopefully, effectively engage in the claims denial appeals process with payers. Time will tell whether this rule will yield the transparency and efficiency it seeks to promote.
1 Advancing Interoperability and Improving Prior Authorization Processes for MA Organizations and Medicaid Managed Care Plans, State Medicaid Agencies, State CHIP Agencies, CHIP Managed Care Entities, and Issuers of QHPs in the Federally-Facilitated Exchanges, 87 Fed. Reg. 76238 (Dec.13, 2022).
2 Ctr. for Medicare & Medicaid Servs., Advancing Interoperability and Improving Prior Authorization Processes Proposed Rule CMS-0057-P: Fact Sheet (Dec. 2022), https://www.cms.gov/newsroom/fact-sheets/advancing-interoperability-and-improving-prior-authorization-processes-proposed-rule-cms-0057-p-fact.
5 Advancing Interoperability and Improving Prior Authorization Processes for MA Organizations and Medicaid Managed Care Plans, State Medicaid Agencies, State CHIP Agencies, CHIP Managed Care Entities, and Issuers of QHPs in the Federally-Facilitated Exchanges, 87 Fed. Reg. at 72329.
12 Id. at 76304.
Id. at 76305.
14 Ctr. for Medicare & Medicaid Servs., supra note 2.