2024 – Prior Authorization Update

| January 29, 2024

2024 – Prior Authorization Update

The Centers for Medicare and Medicaid Services (CMS) recently issued an Interoperability and Prior Authorization Rule that will require Medicare Advantage (MA), Medicaid, Children’s Health Insurance Program (CHIP), and Qualified Health Plans (QHPs) on to streamline data sharing, improve communication between insurers and clinicians, and provide more information and timely responses to prior authorization requests. The regulation aims to decrease the administrative burden of prior authorization and help physicians deliver timely care to patients. This article provides a high-level summary of key provisions in the final rule.

Prior authorization

The new regulation is intended to streamline prior authorization processes for items and services. Whether this goal is accomplished remains to be seen; we will not see most of the provisions implemented for two to three years. Unfortunately, prior authorizations for prescription drugs are excluded from these new policies.

Starting in 2026, MA, Medicaid, and CHIP plans:

  • will have to deliver prior authorization decisions within 72 hours for urgent requests.
  • will have to deliver prior authorization decisions within seven days for non-urgent requests.

QHPs are exempt from these shorter deadlines.

MA, Medicaid, CHIP, and QHPs plans must provide a specific reason for prior authorization denials. These health plans will annually report certain prior authorization metrics such as approval and denial rates on their public websites.

Beginning in 2027, those impacted health plans must build and support prior authorization application programming interfaces (API) that allow a physician to request prior authorization using their electronic health records. The plans will communicate approvals, denials, and requests for more information to the physician through the prior authorization API. The plans must include a list of covered items and services that require prior authorization and any necessary documentation for approval.


Interoperability refers to the ability of health care systems (i.e., insurers, hospitals, physician practices) to exchange and use electronic health information. The new rule stresses the importance of interoperability in fostering collaboration among various health care stakeholders, including health plans, physicians, other health care providers, and patients. The rule requires MA, Medicaid, CHIP, and QHPs plans to create and maintain APIs. The APIs will allow health care professionals to access comprehensive patient information, leading to more informed decision-making and improved care coordination.

The rule requires these health plans to implement and support a Provider Access API that allows physicians to exchange patient information from the health plan with other health care professionals in the network if requested. This new program ensures that essential health data, such as patient history, lab results, and medication lists, can be accessed securely and efficiently. This requirement must be implemented by Jan. 1, 2027.

Electronic Prior Authorization measure for MIPS eligible clinicians

Beginning with the 2027 performance period, CMS is adding a new measure, Electronic Prior Authorization, for Merit-based Incentive Payment System (MIPS) eligible clinicians under the Promoting Interoperability performance category. The MIPS eligible clinician “will either submit an attestation (yes/no) regarding whether they used the Prior Authorization API to submit at least one prior authorization request electronically or claim an applicable exclusion to report the modified Electronic Prior Authorization measures.”

Impact on Physicians and Patients

Physicians may eventually benefit from streamlined processes and improved access to patient information, enabling them to deliver more personalized and efficient care while reducing administrative burdens. With increased access to their health information and a smoother prior authorization process, patients will experience improved engagement and greater control over their health care journey. By promoting interoperability and addressing some prior authorization challenges, the rule paves the way for a more connected, efficient, and patient-centered health care system.