AHIP, BCBSA Voice Concerns About Proposed Prior Authorization Rule

AHIP joined the American Hospital Association (AHA), American Medical Association (AMA), and Blue Cross Blue Shield Association (BCBSA) in opposing the prior authorization reformation efforts from CMS in a notice of proposed rulemaking, laying out their arguments in a letter to CMS.

The organizations agreed that making the process more efficient and cost-effective is crucial. However, they shared concerns about how the proposed rulemaking would interact with previous regulatory standards.

Specifically, the letter to CMS pointed out that the proposed rulemaking could establish standards around prior authorization that conflict with the standards laid out in the Advancing Interoperability and Improving Prior Authorization rule. Having two standards would scramble communication between providers and payers and increase the administrative burden.

First and foremost, the Advancing Interoperability and Improving Prior Authorization rule and the proposed rulemaking put forward differing requirements around interfaces and standards for certain plans.

If both regulations pass into law, federally-regulated health plans would have to offer HL7 FHIR-based application programming interfaces to accommodate electronic prior authorizations under the Advancing Interoperability and Improving Prior Authorization rule. However, they would also have to use both Health Level 7 (HL7) and X12 standards in accordance with the Health Insurance Portability and Accountability Act (HIPAA).

The payer and provider organizations that there is no clear benefit to making plans conform to both standards. Plus, federally-regulated plans would operate on different standards from other health plans.

“This outcome would directly counter the foundational principles of the original HIPAA administrative simplification statute and regulations (i.e., adoption of electronic standards to support uniform communication between providers and all health plans); cause widespread industry confusion; slow implementation; and be enormously expensive for both health plans and providers, as they would undoubtedly need to implement technologies to meet the requirements of both NPRMs,” the letter stated.

Additionally, the stakeholders noted that the notice of proposed rulemaking was aligned with a rule from 2016 that is not up-to-date technologically or in its relationship with more recent regulations. Since the proposed rulemaking aligns with standards from 2016, it does not properly address modern efforts to automate prior authorizations using the Health Level 7 (HL7) Fast Healthcare Interoperability Resources (FHIR) implementation guides.

Payers and providers responded positively to the Advancing Interoperability and Improving Prior Authorization rule when it was proposed in December 2022. Payers supported the legislation’s efforts to improve electronic prior authorization efficiency and its changes related to budgetary concerns. Providers saw the rule as an effort to reduce manual prior authorization burden.

Prior to the proposed rulemaking for the Administrative Simplification rule, CMS finalized a rule for Medicare Advantage related to prior authorization. Namely, the rule imposed a requirement that prior authorizations rejected for medical necessity must be reviewed by a physician with relevant background. Prior authorizations should continue to be valid as long as the treatment is medically necessary.

The finalized rule also offered guidelines for conducting prior authorizations when a patient switches to a new Medicare Advantage plan. Plans must offer a 90-day transition period before requesting a new prior authorization.