Compliance Changes with the Centers for Medicare & Medicaid Interoperability and Prior Authorization Final Rule (CMS-0057-F): Why It’s Time to Rethink Your Prior Authorization[...]

Written by: Cheryl Reifsnyder, PhD and Jill Reeves, Veradigm

2025 is a turning point for the healthcare industry.

In 2024, only 35% of health plans utilized fully electronic prior authorization processes. Providers most often requested prior authorizations via health plan portals, a process requiring an average of 16 minutes per transaction. Complex and changing requirements from health plans, combined with slow turnaround times, meant approval processes could take days or weeks, too often delaying patient care while compounding the administrative burden on providers.

However, passage of the Centers for Medicare & Medicaid Services (CMS) Interoperability and Prior Authorization final rule (CMS-0057-F) in January 2024 brought several new requirements into play, such as:

• Payers will need to implement technological frameworks enabling them to conduct electronic prior authorizations.
• Payers will be required to implement several new Health Level Seven (HL7®) Fast Healthcare Interoperability Resources (FHIR®) application programming interfaces (APIs).
• New rules are going into effect surrounding timeframes and processes involved in prior authorizations.

These regulatory changes are designed to improve electronic healthcare data exchange and streamline prior authorization processes. They raise the bar for payer-provider interactions.

They also make any outdated prior authorization workflows a severe liability for practices.

CMS-0057-F has the potential to transform your practice's ability to access patient data in a timely manner, gain prior authorization for covered items and services, and more-if you keep up with the changes. However, if you continue to use old workflows and outdated technologies, it's likely to result in a loss of time, money, and reputation. Keep reading to learn how to take advantage of the coming changes!

2025: The shifting regulatory landscape

CMS-0057-F includes details for several regulatory changes designed to improve the electronic exchange of healthcare information and streamline prior authorization processes. Taken together, these provisions are intended to mitigate a significant source of provider burden and burnout while helping to improve patient access to timely care.

Streamlining the electronic exchange of healthcare data

One way the CMS Interoperability and Prior Authorization final rule aims to improve and increase the electronic exchange of healthcare information is by requiring impacted payers¹ to implement and maintain multiple FHIR®-based APIs:

1. Patient Access API: The CMS Interoperability and Patient Access final rule (CMS-9115-F, May 2020) had previously required payers to implement a Patient Access API; CMS-0057-F requires payers to add information about prior authorization requests to the data available via this API.
2. Provider Access API: This API enables payers to share patient data with in-network providers with whom patients have treatment relationships. This will facilitate care coordination by giving providers faster, easier access to patients' health information.
3. Payer-to-Payer API: With this API, payers can make patient healthcare data (such as claims information, patient encounters, and previous prior authorizations) available to other payers. This will facilitate care continuity when patients change payers. It will also help ensure patients' continued access to their relevant healthcare data.
4. Prior Authorization API: This API is designed to streamline the prior authorization process and associated communications (described in greater detail below).

Payers are required to implement these APIs by January 1, 2027, using standards and implementation specifications detailed in the final rule.

Improving prior authorization processes

CMS-0057-F also establishes new requirements for the prior authorization process, intended to help ensure patients receive timely care.

First, payers must respond more quickly to prior authorization requests (with decisions), within 72 hours for urgent requests and within 7 calendar days for standard (non-urgent) requests, , which CMS noted would represent a 50% improvement for some payers.

Second, payers must include clear, detailed explanations for any denials-a requirement aimed to improve transparency in the prior authorization process and help providers and patients understand what is needed for approval if they resubmit or appeal the denial.²

These provisions go into effect January 1, 2026.

Impacts on healthcare providers & practices

The changes introduced by CMS-0057-F will significantly impact healthcare practices. The Provider Access API will enable providers to access current patient healthcare data more quickly and easily. The Prior Authorization API will facilitate access to payers' most current requirements for prior authorization requests.

The Prior Authorization API will also:

• Allow providers to query the payer's documentation requirements for prior authorization approval
• Give providers access to other key information, including lists of covered items and services
• Enable providers to submit electronic prior authorization requests
• Deliver real-time status updates and payer decisions on requests (whether a request was approved, denied, or led to a request for more information)

These changes are intended to streamline prior authorization workflows. This will help prevent avoidable delays in patient care while easing a significant source of administrative burden for providers in existing prior authorization processes.

CMS has also introduced a new measure for MIPS-eligible clinicians, "Electronic Prior Authorization," under the Promoting Interoperability performance category. This measure is intended to encourage clinicians and eligible hospitals to adopt the electronic prior authorization processes. It requires MIPS-eligible clinicians to report a yes/no attestation or, if applicable, an exclusion. This new measure goes into effect with the calendar year 2027 performance period and electronic health record (EHR) reporting period.

The risks of clinging to old workflows

Of course, any process changes-however beneficial-come with costs. For your practice to benefit from the regulatory changes introduced by CMS-0057-F, it will need the ability to utilize the Provider Access and Prior Authorization APIs. This could require technology upgrades, training for administrative and clinical staff, and updated workflows-all of which require significant investments of both time and money.

Are these changes worthwhile? Absolutely!

Disadvantages of manual prior authorization processes

In the 2024 CAQH® Index Report, the Council for Affordable Quality Healthcare (CAQH) describes the process of obtaining a prior authorization as "one of the most time consuming, burdensome administrative tasks" for healthcare providers and staff. Prior authorization requests take an average of 24 minutes when conducted manually, using telephone, fax, and/or email; requests conducted using a health plan portal take an average of 16 minutes.

In addition, payers may not respond to manual or partially manual prior authorization requests for days or even weeks, which can significantly delay patient treatment.

CAQH predicts switching to electronic prior authorizations will save providers and staff an average of 14 minutes per transaction.

Benefits of electronic prior authorization

Electronic prior authorizations decrease the need for practices to make phone requests and go through other manual prior authorization processes. The resulting time savings could enable practices to reallocate employees previously responsible for prior authorizations, freeing them to spend more time on patient care. Electronic prior authorization processes would also facilitate faster responses from payers, resulting in fewer treatment delays for patients.

Electronic prior authorizations have the added benefit of improving the accuracy of prior authorization requests, as they eliminate many of the errors caused by manual processes.

Finally, electronic prior authorization can yield significant financial benefits. CAQH reports that conducting prior authorizations manually costs providers an average of $12.88 per transaction. In contrast, electronic prior authorizations are projected to cost an average of $0.05 per transaction.

Taking advantage of the regulatory improvements offered by CMS-0057-F requires practices to be ready to accommodate the resulting changes. Practices must be able to interact with payers' new and updated APIs. They must implement the necessary technology and workflow changes to enable electronic submissions of prior authorization requests and eliminate manual workflows to fully embrace payers' changing prior authorization processes.

Stay ahead of changes with Veradigm Payerpath™

Veradigm Payerpath is a #1 Black Book-ranked revenue cycle solution and interoperability platform. This solution interfaces seamlessly with all major practice management systems and can provide seamless connection with a network of payers for efficient transaction management.

Payerpath is a powerful tool with a wide range of functionalities. In this context, it can help your practice prepare for upcoming changes in healthcare data exchange and prior authorization processes. The Veradigm Payerpath solution can connect seamlessly with existing payer technology; as payers update their technology in accordance with CMS-0057-F's new API requirements, compliance updates will be pushed directly into the platform. This will enable your practice to connect to both the Provider Access and Prior Authorization APIs, facilitating access to patient data and to payers' prior authorization systems. It will enable you to submit electronic prior authorization requests and take advantage of updated prior authorization timeframes.

Electronic attachments

Veradigm Payerpath further streamlines the prior authorization process by enabling you to send electronic attachments with prior authorization requests. The Veradigm Payerpath Medical Claim Attachment solution is powered by Jopari, which has experience processing more than 1 million medical attachments monthly. Clients using Veradigm Payerpath's attachment solution reported notable improvements in several key performance areas:

• Denials due to missing attachments: Decreased from 35% to 5%
• Requests for more information due to missing attachments: Decreased from 25% to 5%
• Appeals due to missing attachments: 80% reduction

Increase prior authorization efficiency

With streamlined prior authorizations with fewer denials and fewer requests for additional information, Veradigm Payerpath will help increase the efficiency and accuracy of your prior authorization process, reducing the administrative burden on providers and staff.

Preparing for change

Ultimately, the goal of CMS-0057-F is to improve patient care by facilitating access to necessary healthcare services. The rules are changing. Don't let legacy workflows cost you time and money-and interfere with providing your patients timely care. Let's talk about how Veradigm Payerpath can prepare your organization for what's coming next.

Contact us today.

References:

1. "Impacted payers" refers to Medicare Advantage organizations, state Medicaid and Children's Health Insurance Program (CHIP) Fee-For-Service (FFS) programs, Medicaid managed care plans, CHIP managed care entities, and Qualified Health Plan (QHP) issuers on the Federally Facilitated Exchanges (FFEs).
2. Note that these requirements do not apply to prior authorization decisions for drugs.