Payers not happy with CMS prior auth rule

January 7, 2021
Todd Shryock

Todd Shryock, contributing author

Insurance industry group says proposed rule too much, too fast

A proposed rule from CMS focused on the exchange of health data and processes related to prior authorizations for Medicaid and other government programs has payers and other industry groups pushing back. The rule’s intent is to help standardize and speed up the prior authorization process, something physicians have been demanding for years.

However, the proposed rule only requires payers, not including plans on the federal exchanges, to make prior authorization decisions within 72 hours for urgent cases and seven days for standard requests. The American Hospital Association says those time limits should be shortened to 24 hours and 72 hours respectively and should apply to plans on the exchanges. The rule also would not apply to Medicare Advantage plans, where nearly one-third of beneficiaries receive care.

America’s Health Insurance Plans, an industry trade group representing payers, says while it supports sharing of information and transparency, the proposed rule is flawed and opposes its implementation for the following reasons:

• Competing priorities and demands of the COVID-19 crisis
• A truncated comment period
• Unrealistic effective dates
• Ongoing implementation of two other rules related to interoperability and transparency
• Lack of implementation guides
• Lack of privacy standards applicable to third-party application developers
• Lack of obligations on electronic health record vendors and health care providers to connect to the proposed technology
• Lack of funding to underwrite the costs of implementation.

AHIP says that its members’ commitment to fighting the pandemic and complying with other regulations has placed intense demands on health insurance providers’ information technology staff and systems. This would result in introducing substantial additional requirements and demands in an environment already facing significant resource constraints and limited time for implementation risks distracting from the crucial fight against the pandemic as we enter a key phase in defeating COVID-19.

The industry group also says that the proposed rule rushes to create several requirements on payers that will fail to achieve the stated goals of improved quality and reduced provider burden. “Not only are the technical standards on which these requirements are built not ready, there also are not comparable proposed requirements on providers to ensure usage of these new technologies,” AHIP said in a statement, adding that more time is necessary to fully understand all the possible ramifications since the organization only had 17 days after the proposed rule was published to review it, rather than the normal 30-60 days.