HAP Comments on CMS Proposed Rule on Prior Authorization, Interoperability

March 15, 2023

HAP and Pennsylvania’s hospital community this week commented on CMS’ proposed rule that aims to streamline prior authorization for Medicare Advantage plans and improve timely access to care.

In the letter, HAP highlighted key considerations related to the implementation of the new rule—such as enforcement, oversight, and compliance—while applauding the agency for taking steps to improve the prior authorization process. HAP continues to advocate for policies and legislation that reduce provider burden and streamline access to care. 

“Considering these burdensome realities, HAP strongly supports prior authorization reform, including adoption of electronic prior authorization processes that can streamline the arduous process to improve patient care and reduce provider burnout,” the letter notes.

The CMS proposed rule follows the Pennsylvania General Assembly’s passage of Act 146 of 2022 to address prior authorization delays and barriers for Medicaid, the Children’s Health Insurance Program (CHIP), and commercial insurance patients, and includes some similar areas of focus.

CMS’ proposed rule would require certain payors (Medicare Advantage, state Medicaid and CHIP Fee-for-Service, Medicaid and CHIP managed care entities, among others) to implement an electronic prior authorization process. It also would: shorten the timeframe for certain payors to respond to prior authorization requests; require payors to include a special reason for denial of coverage and publish prior authorization metrics; and implement standards to enable data exchange from one payor to another payor when a patient changes coverage.

HAP noted the proposed rule could be strengthened with:

• Additional testing to ensure the Prior Authorization Requirements, Documentation and Decision (PARDD) Application Programming Interface (API) leads to the desired process improvements.
• Shortened timeframes for prior authorization responses to 72 hours for standard, non-urgent services, and 24 hours for urgent services for transactions via PARDD API.
• Adequate audit and enforcement mechanisms to ensure plans are compliant with the requirements.
• Creation of an attestation-only measure to mitigate provider burden.

If finalized, the proposed rule would take effect January 1, 2026, with the initial set of metrics proposed to be reported by March 31, 2026.

“HAP urges CMS to expeditiously finalize the Advancing Interoperability and Improving Prior Authorization Processes proposed rule and adopt our recommended modifications to improve timeliness standards and develop enforcement mechanisms to ensure payor accountability,” the letter notes.

HAP’s comment letter is available to review online. The American Hospital Association also provided comments on the proposed rule this week.

For more information, contact Jolene H. Calla, Esq., HAP’s vice president, health care finance and insurance.