CMS Releases Final Rule on Prior Authorization and Interoperability

Rule requires MA, MMC, ACA exchange plans to meet timeframes for PA requests and to provide reasons for denials

On January 17, the Centers for Medicare and Medicaid Services released the “CMS Interoperability and Prior Authorization final rule (CMS-0057-F).” The rule would place new requirements on Medicare Advantage (MA) organizations, state Medicaid and Children’s Health Insurance Program (CHIP) Fee-for-Service programs, Medicaid managed care plans, CHIP managed care entities, and Qualified Health Plan (QHP) issuers on the Federally Facilitated Exchanges (FFE) (“impacted payers”) to improve the electronic exchange of healthcare data and to streamline prior authorization (PA) processes.

Here are the highlights from the PA section of the rule:

• Effective in 2026, CMS is requiring impacted payers (excluding QHP issuers on the FFEs) to send PA decisions within 72 hours for urgent requests, unless a shorter minimum timeframe is established under applicable state law, and 7 calendar days for non-urgent requests.
• Beginning in 2026, impacted payers must provide a specific reason for denied PA decisions.
• CMS is requiring impacted payers to publicly report certain prior authorization metrics annually by posting them on their website. These operational or process-related prior authorization policies are being finalized with a compliance date starting January 1, 2026, and the initial set of metrics must be reported by March 31, 2026.
• It is important to note that the PA provisions in this rule do not apply to drugs.

Additionally, CMS is adding a new measure, titled “Electronic Prior Authorization,” to the Health Information Exchange (HIE) objective for the MIPS Promoting Interoperability performance category and the Medicare Promoting Interoperability Program. MIPS eligible clinicians will report the Electronic Prior Authorization measure beginning with the Calendar Year (CY) 2027 performance period/CY 2029 MIPS payment year and eligible hospitals and CAHs beginning with the CY 2027 EHR reporting period.

CMS first proposed this rule in December 2022.

To view the full text of the final rule, CLICK HERE.
To view the CMS fact sheet, CLICK HERE.
To read the proposed rule, CLICK HERE.