The Centers for Medicare & Medicaid Services (CMS) on Friday finalized the “CMS Interoperability and Prior Authorization” to improve the electronic exchange of health care data and streamline processes related to prior authorization.

The rule requires Medicaid and CHIP managed care plans, State Medicaid and CHIP fee-for-service (FFS) programs, and issuers of individual market Qualified Health Plans on the federally-facilities exchanges (FFE) to implement application programming interfaces (APIs) that will streamline the prior authorization process.

CMS said in an announcement that the final rule builds on the efforts to drive interoperability, empower patients, and reduce costs and burden in the health care market by promoting secure electronic access to health data in new and innovative ways. These significant changes include allowing certain payers, providers, and patients to have electronic access to pending and active prior authorization decisions, which should result in fewer repeated requests for prior authorizations and reduce costs and administrative burden to frontline providers. The agency said the changes will mean providers will have more time to focus on their patients and provide higher quality care.

The rule requires Medicaid and CHIP (FFS) programs, Medicaid and CHIP managed care plans, and issuers of individual market QHPs on the FFEs to include, as part of the already established Patient Access API, claims and encounter data, including laboratory results and information about the patient’s pending and active prior authorization decisions. These payers are also required to share this data directly with patients’ providers if they ask for it and with other payers as the patient moves from one payer to another.

The rule also requires Medicaid and CHIP (FFS) programs and Medicaid and CHIP managed care plans to meet reduced decision timelines for prior authorizations. They now have a maximum of 72 hours to make prior authorization decisions on urgent requests and seven calendar days for non-urgent requests, and all payers subject to the rule are required to provide a specific reason for any denial.

Although Medicare Advantage plans are not included in and, therefore, not subject to this final rule, CMS said it may do so in future rulemaking.

For more information, click here for a CMS fact sheet about the rule.