Prior Authorization Processes and Reporting

 From the article CMS Final Rule Requires Payers to Modify Prior Authorization, Create New APIs by Manatt

"CMS finalized several substantive rules governing prior authorization processes for all items and services (except for drugs) intended to improve how patients and providers seek and receive approval from plans for coverage of services. These changes will take effect in 2026; the precise compliance date varies based on the type of payer.

The final rule requires payers to provide a “specific reason” for denied prior authorization decisions. CMS declined to provide a regulatory definition but noted in the preamble that “a specific reason for denial could include reference to the specific plan provisions on which the denial is based; information about or a citation to coverage criteria; how documentation did not support a plan of care for the therapy or service; a narrative explanation of why the request was denied, and specifically, why the service is not deemed necessary or that claim history demonstrated that the patient had already received a similar service or item.” This can be communicated via portal, fax, email, mail, or phone.

For all payers other than QHPs, the final rule requires notice of prior authorization decisions as expeditiously as a patient’s health condition requires but no later than seven calendar days, unless the payer obtains an extension of up to 14 calendar days total. For expedited requests, impacted payers must provide a decision within 72 hours, unless a shorter minimum timeframe is established under state law (note: MA organizations are exempt from such state-law requirements).

• MA and Medicaid/CHIP managed care plans were already subject to a 72-hour timeframe for expedited requests, but the rule halves the current 14-day timeframe for standard requests.
• CHIP FFS programs are similarly transitioning from 14 days to 7 days for standard requests, and they must comply with the expedited standard.
• Medicaid FFS programs, meanwhile, are not currently subject to maximum timelines as to either standard or expedited requests.

The rule also requires payers to publicly report on their websites certain aggregated metrics about prior authorization—including rates of denials, rates of denials that are reversed on appeal, and resolution timelines—for both standard and expedited requests."