• Politics
  • Diversity, equity and inclusion
  • Financial Decision Making
  • Telehealth
  • Patient Experience
  • Leadership
  • Point of Care Tools
  • Product Solutions
  • Management
  • Technology
  • Healthcare Transformation
  • Data + Technology
  • Safer Hospitals
  • Business
  • Providers in Practice
  • Mergers and Acquisitions
  • AI & Data Analytics
  • Cybersecurity
  • Interoperability & EHRs
  • Medical Devices
  • Pop Health Tech
  • Precision Medicine
  • Virtual Care
  • Health equity

Prior authorization rule will bring change, but doesn’t solve major problems


The federal government approved new regulations to streamline the process of getting approvals. Critics point to major gaps, including the timelines for insurers to respond.

When the federal government released its new final rule to streamline the process of getting approvals from insurers for medical treatments, healthcare groups generally offered strong support.

After all, hospitals, physicians and medical groups have lambasted the process of securing prior authorization from payers for treatments and procedures. They argue that they regularly encounter lengthy battles with insurers that delay patient care and lead to worse outcomes, Health systems and providers say the pre-approval process adds to their costs and is a leading source of burnout.

The Centers for Medicare & Medicaid Services released a new final rule in January to speed up the process and have authorizations handled electronically. Beginning in 2026, many payers will have to send decisions on treatment within 72 hours for urgent requests and seven calendar days for standard medical services. As CMS notes, for many payers, the new rule cuts the response time in half. Payers will also have to cite specific reasons for denials.

Some healthcare leaders say the prior authorization rule makes welcome improvements, but still doesn’t address some major problems. They say the timeline for decisions on approvals is too long and still poses problems for timely patient care, and the final rule doesn’t include decisions on prescription drugs, leaders note.

‘Barrier to getting good care’

Gary Price, president of the Physicians Foundation, tells Chief Healthcare Executive® that the 72-hour decision window for urgent requests “does not fit with medical practice.”

“That type of window for an emergency request just doesn't help a physician in an emergency or urgent situation,” Price says. “It doesn't get answers back to them … It's still a barrier to getting good care. And we need to hold the insurance industry to a higher standard on that.”

Anna Schwamlein Howard, principal of policy development for the American Cancer Society Cancer Action Network, also criticized the new rule for allowing insurers to have 72 hours to make a decision on an urgent request. During a KFF forum on prior authorization last week, Howard also said the timeline for authorizations of routine procedures shouldn’t take a full week.

“We would like to see those timelines sharpened a bit more … to 72 hours for non-expedited and 24 hours for expedited (requests),” Howard said.

Others have called for a similar timeline. Soumi Saha, Premier’s senior vice president of government affairs, said in a statement that “postponing care for potentially up to seven days is still untenable when a patient’s health is on the line."

“Instead of making patients and providers play a dangerous waiting game, Premier maintains that CMS should require payers to deliver responses within 72 calendar hours for standard, non-urgent services and within 24 calendar hours for urgent services,” Saha said.

Exclusion of prescription drugs

The new federal regulations on prior authorizations also don’t cover pre-approvals for prescription drugs, which some also see as a missed opportunity.

Kaye Pestaina, KFF’s vice president and director of the program on patient and consumer protection, notes the final rule doesn’t address decisions on prescription drugs, and that received some pushback.

The new rule “really is talking about the prior authorization process for medical items, not prescription drugs,” Pestaina said in the KFF forum. “Those were carved out of these rules. And actually, CMS got a lot of comment about that.”

Indeed, some of those commenting on the final rule pointed out that specialty drugs, cancer drugs and other medications for chronic conditions require ongoing reauthorizations. They said adding prescription drugs to the regulation would reduce barriers to care.

In response, the CMS said there would be “operational complexities” in adding prescription drugs to the policy. The CMS said it “did not anticipate the overwhelming response to that exclusion under current conditions.” But the agency said it would evaluate its existing policies and standards.

The Medical Group Management Association said it would support future CMS rulemaking to improve the prior authorization processes for drugs.

Price said he thought the exclusion of prior authorizations was a miss, since getting pre-approvals for drugs are “a big part of this prior authorization obstacle course.”

However, Price says he’s hopeful for some relief in authorization for drugs with greater automation in the process, which the new regulation aims to address.

“I think there's a possibility that artificial intelligence might decrease the time consumed by physicians and over their staff. But it's often an unnecessary and wasteful use of their time,” Price says.

Healthcare advocates plan to press Congress for more reforms on prior authorization, including the growing number of pre-approvals being sought in Medicare Advantage plans.

Important gains

Many say the new rule’s lasting accomplishment comes in the move toward bringing more automation to prior authorization, which is sorely needed. Less than a third (31%) of prior authorizations are handled fully electronically, according to CAQH, an organization aiming to streamline administrative tasks in healthcare. Many requests are still submitted by fax machines.

Fumiko Chino, a radiation oncologist with Memorial Sloan Kettering Center, spoke in disbelief about the need to use faxes during the KFF forum on prior authorization.

“We fax all the time,” Chino said. “It's insane. The technology requiring faxes is so frustrating, And the fact that we still have to fax things seems bananas.”

Under the rule, payers will have to put in place application programming interfaces (APIs) to automate the exchange of patient data between payers and providers by 2027.

Akshay Sharma, chief AI officer of Lyric, said the final rule to improve the interoperability of patient data “is welcome news.”

Sharma said the rule “will provide greater clarity on approvals, denials, and proper documentation of decision-making processes. This opens up opportunities to create smarter workflows that were previously unattainable. Overall, I see the proper implementation of this final rule as a big win for innovation that will drive greater levels of transparency, mobility, and fluidity to the system."

Andrea Preisler, the American Hospital Association’s senior associate director for administrative simplification policy, says there are facets of the rule that could be improved, and hospitals will keep pushing for progress.

But Preisler tells Chief Healthcare Executive® the rule’s “standardizing and streamlining of prior authorization processes cannot be overstated or overlooked.”

“There are some areas of course that maybe aren't perfect as they stand today, being that the rule does not apply to drugs covered under a patient's medical benefits, or some of those timelines where we might want to push a little further,” Preisler says. “But I think overall this rule is really potentially game changing for the processing of prior authorization.”

In addition, payers will have to publicly report the percentage of requests that are denied. And CMS estimates the reforms will produce savings of $15 billion in the industry over ten years.

Still, some of these changes are still years away. Jay Anders, chief medical officer of Medicomp, says he understands why the implementation is being delayed, but patients will continue to suffer from a difficult process in waiting for approvals for treatment.

“In the interim, patient care will continue to be impacted by the lack of shared clinical information, and the cost of care will continue to rise until there is a way to see the complete medical record for a single patient,” Anders said. “My biggest concern is that organizations and providers aren't prepared to actually absorb and act upon the shared clinical data once the rule is enforced. Unless we address this issue, physician burnout will increase and patient care will fail to move forward.”

Providers and healthcare leaders also say it’s time to address the sheer number of prior authorizations they encounter from payers. Steven P. Furr, president of the American Academy of Family Physicians, said moving to electronic prior authorization will speed up the process, but that isn’t sufficient.

“Policymakers must also address the overwhelming volume of prior authorizations that physicians must complete,” Furr said in a statement. “Physician practices are being forced to hire dedicated staff to handle prior authorizations instead of investing in staff or tools that would enhance patient care.”

Howard points out that many patients just give up on treatment after denials from insurers.

“They don't want to file appeals," Howard says.

"They don't want to go up against an insurance company that quite frankly, does this for a living and you have a patient that doesn't have the medical knowledge, doesn't understand the system, doesn't understand the process," Howard says. "They're going up against a multinational, multibillion dollar company and they just say, ‘That's it. I'm kind of walking away.’”

Related Videos
Image: Ron Southwick, Chief Healthcare Executive
Image credit: HIMSS
© 2024 MJH Life Sciences

All rights reserved.