On January 17, CMS finalized its Interoperability and Prior Authorization Rule (CMS-0057-F) with the goal of streamlining prior authorization processes and improving the exchange of health information between plans and providers, plans and beneficiaries, and plans with other plans. The rule impacts Medicare Advantage, Medicaid, & CHIP programs including Medicaid managed care and other government-sponsored plans.

Beginning in 2026, the rule requires plans to make several improvements to their prior authorization business processes, including specifying decision timeframes, identifying denial reasons, and reporting on key prior authorization metrics. This includes:

• Requiring plans to communicate the specific reason a prior authorization is denied. This is something LeadingAge has been advocating for to expedite prior authorization decisions and reconsiderations.
• Establishing reduced timeframes by which plans must make a prior authorization decision.
  • 72 hours for expedited or urgent requests for medically necessary services or items.
  • 7 days for standard service and item requests.

We argued for shorter time frames similar to what a bipartisan group of Senators proposed in the Improving Seniors’ Timely Access to Care Act, which called for real-time decision-making via an electronic prior authorization process.

• Requiring plans to publicly report certain prior authorization metrics in 2026, and creating more transparency around these determinations. It will include things such as:
  • Listing all services and items requiring prior authorizations.
  • The percentage of prior authorization requests approved, denied, appealed, and overturned overall.
  • Average time between prior authorization requests and determinations broken out by standard and expedited requests.

These metrics will help CMS determine compliance and give important information to beneficiaries, though it may be challenging because each plan must post its performance on the metrics on its individual website.

In 2027, the rule also requires the plans to begin implementation of a series of APIs (Application Programming Interfaces) including a Prior Authorization API and a Provider-Plan Health information Exchange API for in-network providers. Both are designed to reduce provider administrative burdens and speed health information exchange to improve beneficiary outcomes.

The Prior Authorization API will permit providers to check if a prior authorization is required, submit prior authorization requests from their provider EHRs to the plan, check status, and receive payer response/determination. CMS believes this will reduce administrative burdens on providers and hopes it will speed up determination timelines.

It should be noted that providers are not required to use the Prior Authorization API but some will be incentivized to do so. There is a new metric tied to physician reimbursement for this purpose.

Plans will also be expected to roll out three other APIs in 2027, including a new Provider-Plan Health Information Exchange (HIE) API for in-network providers, which would provide these providers access to more information on the beneficiaries they serve who are enrolled in these plans. Other APIs will facilitate Plan to Patient and Plan to Plan communications.

At this time, it is unclear what steps providers will need to take, if any to avail themselves of the coming APIs but LeadingAge has been reaching out to EHR business partners to learn more and will share this information as these developments take shape.

Overall, LeadingAge is pleased to see these rules finalized and we believe they will lay a solid foundation for making further improvements to these processes that ensure beneficiaries have timely access to the care they need and providers have less burden in helping them get approvals for these services.

CMS recently hosted a webinar (March 26) on the new rule. To learn more, access the recording here (use the passcode 5PAMV^vN) and the slides here.