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CMS Rule Aimed at Curbing Prior Auth Abuse

The Centers for Medicare & Medicaid Services (CMS) released a long-awaited final rule that makes improvements to prior authorization practices used by health insurers.

Under the rule, Medicare Advantage (MA) organizations, state Medicaid and Children's Health Insurance Program (CHIP) fee-for-service programs, Medicaid managed care plans, CHIP managed care entities, and Qualified Health Plan (QHP) issuers on the federally facilitated exchanges (FFEs) will be required to streamline prior authorization processes.
 
Highlights of the Final Rule
  • Starting in 2026, MA and Medicaid plans will have 72 hours to answer urgent requests and seven days for standard requests. The final rule does not change time frames for the prior authorization process for QHP issuers on the FFEs because existing regulations require a determination within 15 days for a standard request and 72 hours for expedited requests.
     
  • Beginning in 2026, impacted payers must provide a specific reason for denied prior authorization decisions, which will help facilitate request resubmission and appeals.
     
  • Impacted payers will be required to publicly report prior authorization metrics by March 31, 2026. Payers must report these metrics in aggregate, including percentages of approved vs. denied standard prior authorization requests.
 
Background

In March 2023, ASNC commented on the proposed rule, asking CMS to shorten prior authorization process time frames even further and encouraging more granularity in prior authorization metrics. CMS finalized, based on comments, that reporting aggregated data at the contract level will be required for MA plans. The agency expressed hesitancy to require more granular data points due to concerns about “data overload, patient understanding, and usability of the data” but noted it may in the future consider requiring MA plans to report at a more discrete level.

The final rule is welcome news to physicians and other clinicians after action on prior authorization legislation stalled in 2022. ASNC is encouraged by the important steps CMS took in the final rule to help ease the prior authorization burden. ASNC will continue to make prior authorization reform at the federal and payer levels a top priority.

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