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What does CMS’ Interoperability and Prior Authorization Final Rule Mean for Primary Care?

The Centers for Medicare & Medicaid Services (CMS) recently introduced a final rule addressing issues related to both interoperability and prior authorization. For primary care, understanding the implications of this rule is crucial. The intended goal of this final rule is to improve the electronic exchange of health care data, as well as to streamline prior authorization processes for things like medical services and procedures. 

Elation Health, as part of our ongoing efforts to advocate for inclusive policies which advance the national landscape for high-value primary care, took a strong position on the prior authorization issue in our response to Health and Human Services’ call for public comment on the proposed rule: 

As we stated in a recent letter sent to CMS: 

“Rather than implement requirements to move prior authorization to standardized electronic interfaces, or APIs, we should focus our energy on eliminating prior authorization requirements altogether. As we have described, primary care is the only medical discipline that can turn $1 into $13 and realize better health outcomes in the process. Prior authorization and utilization requirements are entirely inappropriate in these settings.”

“Elation Health is acutely aware of the daunting administrative burden experienced daily by primary care practices. A significant contributor to this burden is the prior authorization process.” 

On the more complex topic of interoperability, Elation is concerned about the ongoing lack of minimum standards for electronic interface requirements, including the lack of mandatory adherence to industry-identified implementation guides to ensure high quality data exchange between payers, providers, and patients. In our letter to CMS, we recommended the implementation of a mandatory test system to ensure all developers meet the same data standards requirements, while improving clarity and speed of development.

Unpacking the Changes to the Prior Authorization Process

Prior authorization requires healthcare providers to obtain approval from the insurance company before proceeding with certain medical treatments, procedures, medications, or services. While intended to control costs and ensure appropriate utilization of healthcare resources, the prior authorization process has been criticized for its administrative burden and potential to delay patient care. Earlier this year, the AMA released data showing that one-third of physicians surveyed had indicated prior authorization delays had resulted in an adverse event for a patient in their care. In a 2023 report published by the Kaiser Family Foundation, it was found that only 6% of prior authorizations are denied, raising significant questions about the necessity of this process and its ability to meaningfully steer spending and utilization. 

As a result of the final rule, CMS will now require impacted payers to streamline the approval process for certain medical procedures through various technical and regulatory strategies intended to standardize data exchange, enhance efficiency, and improve transparency of the approval process. Payers will be required to provide prior authorization decisions within 72 hours for urgent requests, and provide a specific reason for denials. Providers will be incentivized to adopt the new electronic prior authorization system through a new Merit-based Incentive Payment System (MIPS) measure.

What are the improvements to interoperability? 

Interoperability in healthcare refers to the ability of different information systems and software applications to communicate, exchange, and use patient data seamlessly. It facilitates the sharing of vital health information across various platforms, ensuring continuity of care and improving patient outcomes.

The new final rule will require doctors, hospitals, and insurers to use new tools (Application Programming Interfaces or APIs) to share patient medical information electronically in standardized formats (Fast Healthcare Interoperability Resources or FHIR) to ensure that disparate systems can work together. Health information exchange between and among providers, payers, and patients is expected to be faster and easier for everyone. In particular, a Patient Access API will allow patients to access their own medical information electronically, empowering them to be more involved in their care and share relevant data with providers with ease.

What do these changes mean for primary care?

Primary care practices manage and exchange more health information per patient than any other specialty. Technological improvements which make this exchange more efficient and also empower patients to take charge of their own health information are much needed changes in a system of silos and fragmentation. These changes have the potential to enhance care coordination, improve patient engagement, and streamline the administrative process. In that sense, the new rule is a tremendous step in the right direction. The improvements to technical standardization also benefit technology vendors by improving clarity and speed of development, which frees them to be more responsive to customers.

Unfortunately for primary care, the final rule excludes prescription drugs from these initial prior authorization improvements, due to the complexities of the pharmaceutical industry. In addition, changes which make the prior authorization process more efficient introduce risk of expansion of prior authorization programs. While these programs may be effective tools to curtail wasteful spending in some areas of healthcare, we believe they have no place in primary care, where healthcare dollars are saved, not spent.

What to expect next:

These changes will be implemented in stages, with most taking effect in 2027. Impacted payers are required to implement and maintain specific FHIR APIs by January 2027, ensuring widespread adoption on a clear timeline. New reporting requirements included in the final rule will hold payers accountable and provide insights into efficiency and fairness of prior authorization processes. 

Overall, we are optimistic that these changes will improve communication and efficiency in the healthcare system, making it easier for everyone involved to work together and deliver better care. We look forward to future regulations addressing prior authorization for prescription drugs which acknowledges the unique role primary care plays in the larger healthcare system.

Sara J. Pastoor, MD, MHA is Elation's Head of Primary Care Advancement and leader in primary care advocacy. Dr. Pastoor is a board certified and clinically active family medicine physician. Her experience as a primary care innovator spans a career in military medicine, academic medicine, private practice, and employer-sponsored delivery models. She received her MD from Rosalind Franklin University of Health Sciences and MHA from Trinity University.