The Centers for Medicare & Medicaid Services (CMS) want to make prior authorization faster and easier. They made a rule that requires certain payers to use four special computer programs called APIs. These payers include Medicare Advantage, Medicaid and CHIP fee-for-service programs, managed care plans, and health plans on federal marketplaces. The four APIs are:
Each API has a job to help share health data safely and speed up prior authorization.
The Patient Access API lets patients see their health information, including details about prior authorization (except for medicines). This helps patients understand how prior authorizations might affect their treatment.
The Provider Access API lets doctors and providers see important patient information, claims, and prior authorization details to help coordinate care better.
The Payer-to-Payer API helps different health insurance plans share data when patients change their coverage. This keeps care connected, and patients can choose to share their info.
The Prior Authorization API lets payers list services they cover and the documents needed. It also helps providers send and get prior authorization requests electronically. This speeds up decisions by making communication uniform.
To encourage providers to use electronic prior authorization instead of paper or phone calls, CMS added rules to programs that pay providers based on performance. These include the Merit-based Incentive Payment System (MIPS) and the Medicare Promoting Interoperability Program.
Starting in 2027, providers and hospitals must show they use electronic prior authorization with certified electronic health records (EHR) technology. A new “Electronic Prior Authorization” measure under MIPS offers payment bonuses to those who use electronic PA. Providers who don’t use it may get financial penalties.
By including electronic PA in payment rules, CMS wants to:
Additionally, payers must follow rules to decide on PA requests within 72 hours for urgent cases and seven days for regular cases, starting January 1, 2026. These deadlines are shorter than before.
The CMS rule means hospital managers, medical practice owners, and IT staff need to change how they work. They must add and connect APIs to make prior authorization easier and follow the new rules.
Hospitals need to work with electronic health record (EHR) companies and insurers to connect systems using HL7 FHIR® standards. This requires updates to software, staff training, and protecting patient data. The Department of Health and Human Services (HHS) allows hospitals to use pure FHIR solutions without the older HIPAA X12 278 standard, which can make things simpler.
Hospitals must change from paper and phone methods to digital processes that allow quick submission and approval of prior authorizations. Managers need to set rules for sending requests fast, tracking replies, and handling denials with clear reasons so appeals can be made quickly.
Staff need new roles or training to support electronic PA workflows. IT teams will handle system updates and fixes. Clinical and office staff will learn the new steps to avoid slowing down patient care.
Starting March 31, 2026, payers must share yearly reports on prior authorization data. While this mainly affects payers, hospitals can use this information to improve quality and talk with insurers.
Hospital leaders should think about how sharing more information with patients will change patient relations. The Patient Access API and clearer PA decisions help patients understand what is happening, possibly lowering confusion and frustration.
The CMS rule goes along with more interest in using AI and automation to manage health care tasks. These tools can help hospital administrators handle prior authorization better.
Some companies use AI to automate phone calls and answering services. These AI-powered virtual helpers can handle prior authorization questions, gather documents, and give quick updates to patients. This helps reduce work for staff and can make patients happier.
AI can read insurance rules, check coverage, and guess if prior authorization will get approved. These systems help prepare correct PA requests with needed documents to avoid mistakes that cause delays or denials.
Automation tools can pull important facts from clinical papers, organize them by payer needs, and send requests electronically through the Prior Authorization API. This cuts down manual data entry and speeds up processing, letting staff focus on cases that need personal attention.
AI systems can watch the status of PA requests, send reminders for deadlines or denials, and suggest what to do next based on past data. This helps meet CMS deadlines—72 hours for urgent cases and seven days for normal ones—and avoids late decisions that may hurt patient care.
Using electronic prior authorization is quickly becoming required for daily operations. Hospitals, clinics, and medical offices across the U.S. must prepare IT systems and train staff on electronic methods before the 2027 CMS timeline.
Providers should work with payers and technology companies to use the required APIs, meet MIPS goals, and improve their administrative steps.
Tools with AI and automation, like those from Simbo AI, can help by handling patient communication, speeding data collection, and helping follow new PA rules.
Hospitals and practices that start early with these technologies and CMS standards will likely reduce paperwork, speed patient care, and improve financial results under value-based payment systems.
The CMS final rule pushes healthcare providers to use electronic prior authorization. This step will improve data sharing, speed decisions, and make processes clearer. Hospital leaders, medical providers, and IT staff must get ready by updating technology, changing workflows, and training employees. Using AI and automation tools will help manage these changes and improve healthcare delivery in the United States.
The CMS rule aims to facilitate electronic exchange of healthcare data, expedite prior authorization processes, and reduce burdens for payers, providers, and patients, with an estimated $15 billion savings over 10 years.
Impacted payers include Medicare Advantage Organizations, state Medicaid and CHIP Fee-for-Service programs, Medicaid and CHIP managed care plans, and Qualified Health Plan issuers on Federally Facilitated Exchanges.
The APIs are (1) Patient Access API, (2) Provider Access API, (3) Payer-to-Payer API, and (4) Prior Authorization API.
It enhances patient access to data and understanding of prior authorization impacts, excluding drugs, by providing prior authorization information alongside other healthcare data.
It shares patient and claims data, including prior authorization info (excluding drugs), with in-network providers to improve care coordination and support value-based payment models.
This API shares claims, encounter data, and certain prior authorization info (excluding drugs) between payers to enhance patient care continuity and allows patients to opt into data sharing.
It identifies documentation requirements and supports electronic prior authorization requests and responses, accelerating decision-making and streamlining the process.
By January 1, 2026, payers must issue decisions within 72 hours for urgent requests and seven calendar days for non-urgent requests, halving previous timeframes.
No, the new prior authorization rules and API data requirements exclude prior authorizations for drugs.
The rule adds a new measure under MIPS and the Medicare Promoting Interoperability Program to encourage providers and hospitals to implement electronic prior authorization processes.
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