Health Insurance Managed Care Pharmaceuticals

Federal rules could streamline prior authorization decisions…but not for drugs

A CMS proposed rule would expedite the prior authorization approval process. CMS summarizes key provisions of the rule as follows:

Proposals include requiring implementation of a Health Level 7® (HL7®) Fast Healthcare Interoperability Resources® (FHIR®) standard Application Programming Interface (API) to support electronic prior authorization. They also include requirements for certain payers to include a specific reason when denying requests, publicly report certain prior authorization metrics, and send decisions within 72 hours for expedited (i.e., urgent) requests and seven calendar days for standard (i.e., non-urgent) requests, which is twice as fast as the existing Medicare Advantage response time limit.

These rules would apply to Medicare Advantage (MA) organizations, state Medicaid and Children’s Health Insurance Program (CHIP) agencies, Medicaid managed care plans, CHIP managed care entities, and Qualified Health Plan (QHP) issuers on the Federally-facilitated Exchanges (FFEs). However, these rules do not apply to employer-sponsored health plans.

However, prior authorizations will not be expedited for all health care good and services. Axios reports:

There’s a notable gap in new federal rules requiring insurers to streamline decisions on whether they’ll cover treatments ordered by doctors: They don’t apply to drugs.
Why it matters: Drugs account for a significant share of prior authorization requests, and patients and doctors argue that the new rules, as is, won’t increase access to needed treatments.
The Biden administration says it wants to improve the coverage request process for physician-administered drugs, but it’s still figuring out how to navigate the systems that insurers have in place to covermedications.
Driving the news: Patient advocates and the health industry applauded rules released earlier this month that require federally funded insurers to act faster on prior authorization requests, give a reason for coverage denials, and update electronic systems that facilitate prior authorizations.
But the rules only apply to medical items and services.

Part of the reasons is likely because CMS in essence ‘outsources’ prescription drug coverage to Part D plans. However, as CMS becomes more involved with drug price negotiation with IRA, it will be interesting to see if these prior authorization rules are soon expanded to include drugs.