CMS is proposing an important expansion of its 2024 final rule that establishes an electronic prior authorization process to include drugs covered under a medical benefit. CMS proposes to require impacted payers to support three National Council for Prescription Drug Programs (NCPDP) standards — the SCRIPT, Formulary & Benefit (F&B), and Real-Time Prescription Benefit (RTPB) standards — beginning Oct. 1, 2027. The proposed standards allow health care professionals to query formulary information, determine real-time coverage information, and exchange electronic prior authorization requests and decisions for drugs.
The rule that was effective in part this year will be fully implemented next year. It requires federally regulated health plans (Medicare Advantage, Medicaid Managed Care, CHIP, and ACA plans) to use an electronic process for prior authorizations. It also standardizes the timelines by which health plans must respond to prior authorization, and it improves transparency.
This rule was the most significant federal action to improve the burdensome prior authorization process. However, it notably excluded drugs.
The new proposed rule would add drugs to this existing regulatory framework. It will standardize the process, increase transparency, and ensure clinicians can focus on caring for patients. HHS proposes that HIPAA covered entities — health care clinicians, health plans, and health care clearinghouses — that conduct the specified electronic transactions must comply with the requirements within 24 months of the final rule’s effective date. Small health plans would have 36 months to comply. Covered entities that do not conduct electronic prior authorization transactions would not be required to adopt these standards.
Electronic interoperability
The existing final rule establishes a Fast Healthcare Interoperability Resources (FHIR)-based application programming interface (API) to facilitate interoperable electronic prior authorization requests. CMS is proposing to require prior authorizations for drugs under this same API framework. The FHIR-based API is not required until Jan. 1, 2027.
Response timelines
Under the existing regulations, health plans currently have seven days to respond to prior authorization requests (72 hours for expedited requests). CMS is proposing to require responses to prior authorization requests for drugs within 24 hours for urgent requests and 72 hours for standard requests. By automating workflows in real time, this system should simplify clinical submissions, reduce overhead, and ensure faster, more precise results.
Transparency
The proposed rule would expand the existing regulatory requirement for health plans to communicate a specific reason for denying prior authorization requests for any drugs.
The 2024 final rule requires that impacted payers annually report prior authorization metrics for non-drug items and services on their public websites. CMS is proposing to add requirements for impacted payers to report the numeric counts in addition to percentages for certain existing metrics. Impacted payers would also have to report additional prior authorization metrics publicly. Patients, providers, and policymakers would gain clearer visibility into the consistency and efficiency of the prior authorization processes. Public reporting would enable more meaningful comparisons across plans and enhance accountability in how prior authorization decisions are managed.
Requests for information
The proposed rule includes requests for information (RFIs) on:
- Improving electronic event notifications for care coordination
- Strengthening health care, cybersecurity and system resilience
- Enhancing oversight of payer APIs
- Streamlining step therapy processes
- Improving prior authorization for laboratory tests and durable medical equipment, prosthetics, orthotics, and supplies
Next steps
CMS is now collecting public comments on the rule and responses to the RFIs until June 15. The Advocacy Council will be submitting comments on this proposal. CMS will then need to issue a final version of the rule that addresses the public comments it receives.
The Advocacy Council – ADVOCATING FOR ALLERGISTS AND THEIR PATIENTS.
