What the Interoperability and Prior Authorization Rule Means for the Patient Experience

What does the new interoperability and prior authorization rule mean for the patient experience? Julie Barnes, founder and principal of Maverick Health Policy, and Sarah Dencker, vice president of Network Health, discuss the latest CMS final rule.

By Medecision

Last month, we hosted a webinar focused on advancing utilization management performance. Julie Barnes, founder and principal at Maverick Health Policy, and Sarah Dencker, vice president at Network Health, a regional health plan in Wisconsin, joined us to discuss the “Interoperability and Prior Authorization” final rule, which was passed by the Centers for Medicare & Medicaid Services (CMS) on January 15, 2021.

The final rule promotes data sharing, more patient access to personal health information, coordinated care and interoperability to make the prior authorization process more efficient. If the final rule is implemented as it is currently drafted, then it will go into effect in January 2023. However, like dozens of other federal rules, it is undergoing review by the new administration, which has not yet indicated whether it intends to implement the rule, change it or withdraw it altogether, Barnes said.

“It seems likely that the rule will move forward,” Barnes said. “For years, administrations on both sides of the political aisle have been trying to give people access to their own healthcare records and make sure the system is not only sharing information but also creating rules that address pain points like prior authorization.”

Prior Authorization Improves the Patient Experience

Although the final rule was passed quickly, it applies to only a few health plans including: Medicaid and Children’s Health Insurance Program (CHIP) managed care plans and fee-for-service programs, individual market Qualified Health Plans, and federally facilitated exchanges. (Medicare Advantage and employer-sponsored insurance plans were not included in the final rule, Barnes said, though it is expected that the rule will eventually be applied to all plans at some point.) The final rule requires payers to use application programming interfaces (APIs) built to the Health Level 7 (HL7) Fast Healthcare Interoperability Resources (FHIR) standard to give providers access to more data and make the prior authorization process more efficient, Barnes explained.

“The prior authorization rule is really about making sure that people get the right treatment for the right cost—and without delay,” Barnes said.

What does that mean? For starters, no more outdated fax machines, Barnes said. The API must be able to send prior authorization requests and receive responses electronically. The final rule also states that payers must send prior authorization decisions within 72 hours for urgent requests and seven calendar days for standard requests. These shorter time frames can help improve the patient experience.

“Thanks to this rule, millions of patients will no longer have to wrangle with prior providers or locate ancient fax machines to take possession of their own data,” CMS Administrator Seema Verma said in a press release. “Many providers, too, will be freed from the burden of piecing together patients’ health histories based on incomplete, half-forgotten snippets of information supplied by the patients themselves, as well as the most onerous elements of prior authorization. This change will reverberate around the healthcare system for years and decades to come.”

Barnes said that, even though Medicare Advantage plans are not impacted by the rule, payers will take the prior authorization process seriously because of the financial incentives. When patients are more satisfied with their level of care, higher scores and bonus payments follow.

“Utilization management and prior authorization programs are often perceived negatively,” Dencker said. “They are often perceived as a barrier to necessary care. So our focus has to be creating a plan that influences the members’ perception specifically around getting the care they need and getting it quickly.”

The members of Network Health receive a biannual newsletter that communicates what prior authorization and utilization management are in terms that are easy to understand—and explains the potential harm that can occur from unnecessary tests, procedures and imaging.

Because the new prior authorization rule places an emphasis on timely decisions, Network Health has taken measures to make its process more efficient, Dencker said.

“Our utilization management staff members work to the maximum level of their licensure, which means that data entry and support tasks are completed by specialist staff and clinical reviews are completed by our nurses and medical directors,” Dencker said. “We also have a licensed practical nurse on staff to help triage cases and do outreach for needed clinical information.”

In addition, Network Health has added weekend and holiday coverage to improve timeliness and maintain regulatory requirements, Dencker added.

“We put a lot of focus on provider and patient satisfaction,” Dencker said.

Pushback From Payers

There has, understandably, been pushback from payers, Barnes said. Matt Eyles, CEO and president of America’s Health Insurance Plans, released a statement criticizing CMS for rushing the rule, calling it “shabbily and hastily constructed.” Eyles likened it to putting “a plane in the air before the wings are bolted on by requiring health insurance providers to build these technologies with incomplete and untested instruction manuals.”

However, Barnes believes that payers will come around once they realize it doesn’t hurt anything to streamline the prior authorization process.

For example, Dencker recommended that health plans continuously monitor authorization patterns and review approval and denial percentages on a regular basis. “If there are services that you’re rarely denying and have a very high approval rate, then you may be able to take them off your authorization list,” Dencker suggested. “It’s costing more time, money and administrative expense to review these cases if they’re never being denied.”

“I think we’re going to see this happen often,” Barnes said. “As health plans (like Network Health) start to eliminate some prior authorization requirements, competitors will follow suit.”

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