With New Policy, CMS Promises to Exit "Stone Age" of Health Information

In a move that may reduce burnout for providers and get needed medications, such as biosimilars, into the hands of patients faster and with less hassle, CMS has established a new policy on prior authorizations and the electronic exchange of health information.

The system sets deadlines for payers to approve or deny urgent requests for health care, requires them to provide reasons for their decisions, and incorporates the use of electronic interface applications that facilitate the communication of health records information between providers and payers.

Seema Verma, administrator of CMS, has described the “new rule” as a departure from “Stone Age” reliance on fax machines; a move that gives patients, payers, and providers ready access to patient data; and an end to “mindless nitpicking and wrangling” over patient entitlements to care.

She described the rule as “the result of numerous listening sessions with plans and providers aimed at crafting a new process that balances the need for greater efficiency and consistency in prior authorization with its important role in preventing fraud, abuse, and unnecessary expenditures.”

The new policy was developed by the Office of Burden Reduction and Health Informatics, which CMS created in June 2020 specifically to increase the efficiency of health information transfers and ease regulatory and administrative burdens faced by providers.

CMS also hopes to see a reduction in repeated requests for prior authorization and an overall reduction in health care costs.

The new CMS Interoperability and Prior Authorization rule affects Medicaid and Children’s Health Insurance Program (CHIP) managed care plans, state Medicaid and CHIP fee-for-service programs, and issuers of individual market Qualified Health Plans on the federally facilitated exchanges. These payers would have to implement software to allow the smooth flow of electronic health information about patients and assist with prior authorization.

The deadlines affecting maximum response time for prior authorization requests go into effect on January 1, 2024. For nonurgent requests, payers will have a full calendar week to respond.

“For patients, there will be no more wrangling with prior providers and locating ancient fax machines to take possession of one’s own data; for providers, there will be no more piecing together patient health histories based on incomplete, half-forgotten snippets of information pried out of the patients themselves; for payers, this is the first step towards building the important data sharing systems we need to move towards value,” Verma said.

In an American Medical Association survey last year, prior authorizations were cited as a growing burden on physicians, 91% of whom said they believe prior authorization requirements delayed patients’ access to care and 88% of whom said the burden of these requirements has increased in recent years.