Prior authorization means healthcare providers must get approval from a patient’s health plan before doing certain tests, treatments, or medications. This helps control costs and make sure care is right. But it often takes a long time and involves phone calls, faxes, and many forms. This slow process can cause delays that hurt patient health and satisfaction.
A 2022 American Medical Association survey found that 91% of doctors said prior authorization harms clinical outcomes. Also, 82% said delays made patients stop their treatments. About 34% of doctors said delays even caused serious problems for patients. These numbers show that prior authorization needs to be improved for both doctors and patients.
Insurance companies have problems too. In 2022, they got around 38 million manual prior authorization requests and 44 million partly manual ones. Manual requests cost about $3.72 each, while electronic ones cost about $0.05. The manual process wastes money and time because providers must deal with many different insurer rules. This adds to the overall cost of healthcare.
The Centers for Medicare & Medicaid Services (CMS) made a new rule called the CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F). It was announced in January 2024 and starts January 1, 2026, with full API use required by January 1, 2027. The rule is meant to update prior authorization.
This rule says that payers like Medicare Advantage, Medicaid, CHIP, and Qualified Health Plans must:
This pushes payers to move from old systems to new platforms that share data in real time using HL7 FHIR APIs. HL7 FHIR is a technology framework that lets healthcare systems exchange pieces of information like patient details, insurance claims, clinical documents, and treatment plans.
CMS also allows payers to use FHIR alone or along with older X12 transaction standards. This helps reduce penalties while payers start using the new system and encourages wider acceptance of the technology.
FHIR APIs give providers’ Electronic Health Record (EHR) systems and payers’ platforms a standard way to talk to each other in real time. This improves prior authorization by:
Many healthcare groups and tech vendors work together on projects like the HL7 Da Vinci Project. This project builds FHIR guides to meet CMS rules. The goal is to remove extra manual work and make care workflows smoother.
Artificial Intelligence (AI) and automation work with HL7 FHIR APIs to make prior authorization better. They help payers and providers automate harder tasks.
Some ways AI helps:
These changes cut processing times a lot. For example, OnyxOS Connector uses API and AI to reduce authorization from days to minutes.
Some companies like DrFirst use AI and automation to combine benefits check and prior authorization for both pharmacy and medical benefits. This helps especially with specialty medicines.
Medical practice managers, owners, and IT staff in the U.S. need to get ready by:
The January 1, 2027 deadline for full API use means providers and payers should act quickly.
The prior authorization process in the U.S. is changing a lot due to CMS rules and HL7 FHIR standards. These changes can turn a slow, difficult process into a faster, clear, and smooth exchange between providers and payers.
Medical practice managers and healthcare IT staff need to learn and use FHIR APIs for prior authorization to reduce paperwork, improve workflows, and make patients happier. These systems work inside electronic health records, allowing quick and clear communication with help from AI and automation that improve work for both providers and payers.
There are still challenges to add these new tools, but starting early helps organizations meet CMS deadlines, follow federal rules, and improve patient care quality and speed.
HL7 FHIR APIs are key to updating prior authorization workflows. They save money, help providers and payers work better together, and cut wait times for patients. Medical practice managers and healthcare IT teams should focus on using these new tools soon to run their operations better and give patients better care.
The CMS Interoperability and Prior Authorization Final Rule aims to make prior authorizations faster, easier, and more efficient while saving $15 billion over 10 years by streamlining processes for patients, physicians, and payers.
The rule impacts Medicare Advantage organizations, Medicaid and CHIP fee-for-service programs, Medicaid and CHIP managed care plans, and issuers of Qualified Health Plans on Federally-Facilitated Exchanges.
Payers must send decisions within 72 hours for expedited, urgent requests and within one week for standard, non-urgent requests starting in 2026.
Payers are required to provide a specific reason for denying prior authorization requests to facilitate easier resubmissions or appeals.
CMS mandates implementation of a Health Level 7 (HL7) Fast Healthcare Interoperability Resources (FHIR) Prior Authorization API to automate and streamline the end-to-end prior authorization process.
HHS will exercise enforcement discretion allowing covered entities to use a FHIR-only or FHIR plus X12 278 combination API without penalty, providing flexibility in meeting the CMS interoperability requirements.
The compliance deadline for expanded Patient Access APIs and Provider Access APIs to include prior authorization data is delayed to January 1, 2027.
Payers must provide patient claims, encounters, clinical, and prior authorization data via APIs with patient consent, enabling better data exchange among providers and payers.
By speeding up decision times, increasing transparency on denials, and enabling secure, interoperable data exchange, the rule aims to reduce patient wait times and administrative barriers.
CMS intends to break down barriers for providers, enhance data flow between patients, providers, and payers, and promote efficiency to improve health outcomes and the overall healthcare experience.
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