By: Seth Robbins, RCS Compliance Associate, RCS Legal Support & Audit, Indiana University Health
The Centers for Medicare and Medicaid Services (CMS) is once again engaging with the payer and provider communities on healthcare interoperability. This is being done through the issuance of a new proposed rule that is set to create new burdens for payers but frees up providers to focus more on clinical care.
In this proposed rule, CMS is requiring certain payers (Medicare Advantage Plans, state Medicaid and Children’s Health Insurance Program (CHIP) agencies, Medicaid Managed Care Plans, CHIP managed care entities, and Qualified Health Plan (QHP) issuers on the Federally facilitated Exchanges (FFEs)) to implement and maintain a new Fast Healthcare Interoperability Resources (FHIR) Application Programming Interface (API) called “Prior Authorization Requirements, Documentation, and Decision (PARDD) API.”
According to CMS, the API would allow a provider to query a payer’s system to determine whether prior authorization was required for certain items and services (drugs are explicitly excluded) and identify documentation requirements. Additionally, this API would also allow for the automated compilation of required data to auto-populate HIPAA-compliant prior authorization transactions. Finally, the API must have the capability of responding to providers that include information regarding payer approval, denial, or request for additional documentation to support the provider’s prior authorization request.
These changes would have significant ramifications for providers. Currently, providers that handle prior authorizations in-house expend a considerable amount of resources in identifying prior authorization requirements and obtaining decision updates for specific items and services for various payers. Most payers have different points of access when it comes to obtaining this information. Some payers maintain an online manual that contains these requirements, some require providers to call payer representatives to confirm prior authorization requirements and updates, and some even have proprietary provider portals that supply this information to providers. Consequently, with the balkanization of access points for information, it is not surprising that providers struggle with obtaining prior authorization requirements and other related updates promptly.
The proposed API changes all of this by allowing providers real-time access to the above prior authorization information. This significantly reduces the amount of time and effort it takes to process prior authorization requests, which allows providers to focus more on patient care. CMS estimates that physician practices and hospitals will save over $15 billion over 10 years.
If finalized as proposed, the implementation date for these requirements will be January 1, 2026.
You can view the full text of the proposed rule here.
member center
