Dept of Health & Human Services Final Rule on Medicare Prior Authorization: A Tool

Prior authorization has arisen as an issue for Medicare Advantage Organizations (MAO)—insurance companies—and Medicaid–states. According to consumer claims, consumers are denied needed coverage unnecessarily.  You can imagine the pain and hardship this causes.  What if there was a Medicare prior authorization tool providers, insurance companies, and patients could use to communicate with one another?  

Congress recently conducted hearings on prior authorization denials, and the Department of Health & Human Services (DHHS), which is the ultimate supervising authority for Medicare (CMS) and Medicaid, issued a final rule that offers a partial solution to the problem.  

DHHS initiated the creation of a Medicare prior authorization tool to speed up the process and reduce errors when it comes to prior authorizations for medically necessary treatments and procedures.   

The DHHS Final Rule

The DHHS mandated the establishment of a standardized electronic platform for exchanging medical and billing information between payers (insurers and states—for Medicaid), providers, and consumers.  All three will be able to see prior authorizations while in process in real-time and interact with one another.

Doctors will see their prior authorization submission as the payer (insurance company) processes the prior authorization.  They will see if codes are incorrect or documentation is missing; if denied, doctors will see the reasons.  

Payers will see additional information added and corrections made to the prior authorization requests in real-time. They can track the prior authorization because there is a timeline they all can see.  

Payers can see the medical history and even similar prior authorizations approved or denied for the patient from the past.  

Payers can better coordinate with other payers when other insurance companies may be involved.  

Consumers can see that the doctor’s office is actually submitting the prior authorization and where the request is in the process rather than calling the provider to check-in.  

DHHS aims to create a more efficient, responsive, and transparent system than the current process for prior authorization.  This electronic platform will be for

• Medicare 
• Medicaid
• Affordable Care Act (ACA) Marketplace
• CHIP (Children’s Health Insurance Program)

The platform is called Application Programming Interfaces (API). While it will be for government-sponsored health plans and not private insurance, like employer health plans, these types of institutional changes usually trickle down to the private sector eventually.  

What’s on the Application Programming Interfaces (APIs)?  

Providers, payers, and consumers will be able to look up: 

• Medical items and services that require prior authorization.  
• Required documentation for the plan to make a prior authorization decision.
• Current status of a prior authorization decision. 

The API (Application Programming Interface) will be the Medicare prior authorization tool that allows providers and payers to communicate quickly and easily and consumers to monitor the process.  

The prior authorization details available through the APIs will include:

• Prior authorization status
• Date of approval or denial of a prior authorization request
• Date or circumstance when the prior authorization ends.
• What items or medical services were approved
• Reason for denial: if denied
• Administrative and clinical information submitted by a provider.

This could also include information about past prior authorization decisions beneficial for a patient who is required to obtain prior authorization again for the same service when switching health plans. 

Medicare Prior Authorization Timeframes

Currently, Medicare Advantage Plans can take up to 14 calendar days for a standard decision. Expedited decisions must be completed within 72 hours of the request for medical treatment.  

With the final rule, prior authorization timeframes were shorted to 7 calendar days, and the same 72-hour rule was used to expedite prior authorization decisions.  

Reasons For Denial

The plans must explain the denial to the provider and patient through the APIs.  This was not always done, especially if the denial was for miscoding or lack of supporting documentation. 

Now, the patient can see the denial.  They do not need to rely upon the doctor’s office to explain what the insurance company did or didn’t do, particularly if the provider’s back office did not provide adequate documentation.  Everyone can see what the other one is doing or not doing.  

Everyone can also see what can be done to appeal or overturn the denial. 

Public Reporting of Medicare Prior Authorization Because of the Tool

Insurance companies will be required to report their denial ratios on their website.  Consumers will be able to see how often insurance carriers deny prior authorizations and thus determine which Medicare Advantage plan or other government-sponsored programs to choose.  

The hope is that Medicare Advantage Organizations (MAO) will be motivated to improve the prior authorization processes through education, better technology, and more efficient and robust systems.  

The data required to be listed on the payer (insurance company) website will be: 

• List of all items and services that require prior authorization.
• Percentage of standard and expedited prior authorization requests approved & denied (aggregated for all items and services)
• Percentage of standard prior authorization requests that were approved after appeal.
• Percentage of standard and expedited claims where decision timeframes were extended, followed by a request approval.         
• Average and median timeframes between a prior authorization request and a decision for standard and expedited prior authorization requests.

Implementation January 2027

As with any government legislation and systemic changes, time is required. The DHHS final rule set January 2027 as the effective date for the proposed regulations.  

Building a system as large as the API takes time to provide an effective and robust tool for the Medicare prior authorization process.

Bottom Line: Medicare Prior Authorization Tool

I find this awesome.  Too many times, consumers are in the dark.  All they know is they can’t get their treatment.  They do not know the truth.  

Is this something Medicare covers?  Did the doctor’s office submit the request correctly, and did they fight to approve it?  Is the insurance company being unreasonable?  Can I do anything?  

It is hard to bluff when everyone can see everyone else’s cards.   Light is the best disinfectant for an infection.