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Myndshft Blog

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March 6, 2023

Full Steam Ahead: Regulations Create Momentum for Streamlined Healthcare Data Exchange & Prior Authorization Automation

by Susan Lawson-Dawson | Healthcare Technology, Prior Authorization

Remember the classic tale of The Little Engine that Could?  Moving forward on healthcare interoperability has felt like chugging uphill slowly, but as existing and new regulations come into force, momentum will shift. What can you expect to see? Improved data exchange between providers and payers, enabling streamlined processes like prior authorization automation

Mapping the regulatory path to interoperability

This journey officially began back in 1996, when the Health Insurance Portability and Accountability Act—or HIPAA—set national standards for electronic health transactions and code sets, as well as privacy and security rules for protected health information. 

In 2003, the Medicare Prescription Drug, Improvement, and Modernization Act led to the establishment of national standards for e-prescribing. 

The 2009 American Recovery and Reinvestment Act followed. While primarily intended as a stimulus bill following the 2008 financial crisis, the Act included funding for the implementation of health information technology (HIT) and established the Medicare and Medicaid EHR Incentive Programs to encourage adoption of electronic health records. 

The 2010 Patient Protection and Affordable Care Act also included creation of the Center for Medicare and Medicaid Innovation, which promotes the development and adoption of innovative payment and service delivery models, including those that use HIT. 

In 2015, the Medicare Access and CHIP Reauthorization Act established incentives for healthcare providers to participate in value-based care models and leverage HIT to improve quality and efficiency. 

The 21st Century Cures Act of 2016 required the Department of Health and Human Services to establish standards and criteria for certified EHR technology to support the secure exchange of health information, including through use of APIs. 

The Final Rule on Interoperability and Information Blocking arrived in 2020. This rule, issued by the Office of the National Coordinator for Health Information Technology, requires EHR and other HIT vendors to use standardized APIs to enable easy, secure exchange of health information between different EHR systems and prohibits certain practices that prevent or discourage the sharing of health information. 

The Advancing Interoperability and Improving Prior Authorization Processes Proposed Rule was introduced in December 2022 and is currently open for public comments. The proposal builds on earlier rulemaking, including a May 2020 final rule on interoperability and a withdrawn interoperability regulation from December 2020.  In an issue brief on the CMS-proposed rule, the Kaiser Family Foundation notes, “The proposal launches the government’s next step in addressing a longstanding goal to improve health care administration through ‘interoperable’ systems based on the use of standardized protocols for payers and providers across federal health programs.” 

We dig a little deeper into this proposed rule next, so keep reading. 

Proposed rule aims for seamless data sharing, prior authorization process efficiencies 

The proposed rule impacts payers among Medicare Advantage (MA) plans, Medicaid managed care plans (MCP), Medicaid fee-for-service (FFS) plans, Children’s Health Insurance Program (CHIP) managed care and fee-for-service plans, and Qualified Health Plans (QHP) on The rules, when finalized,  would become effective in 2026. Affected payers will need to have the following in place: 

  • Implement the Fast Healthcare Interoperability Resources—or FHIR—Application Programming Interface (API) for Prior Authorization Requirements, Documentation, and Decisions (PARDD). The PARDD API enables streamlined data exchange between providers and payers for an automated prior authorization process. It also enables patient access to information regarding prior authorization requests and decisions. 
  • Give providers details on prior authorization status, including the specific reason(s) for a prior authorization denial. 
  • Speed up the prior authorization decision and notification process, from 14 days to 7 days. The only exception? QHPs would continue to have a 15-day window for sharing decisions.
  • Publish an annual public disclosure listing all services for which the payer requires prior authorization as well as specific data related to the percentages of approvals and denials, percentage of prior authorization requests approved after appeals, and the average time for a prior authorization determination. 

In addition, the proposed rule builds on a previous requirement for a standardized API that gives patients access to personal claims and encounter data along with some clinical data. The revision also expands requirements to include information about prior authorization and to report to the CMS annually on usage of the patient access API. 

The proposed rule also addresses data exchange between providers and payers, including historic prior authorization decisions to give providers a more comprehensive view of patients’ care journeys. Finally, the proposed rule also would allow the exchange of certain patient information between payers, if patients opt-in for this data exchange. The CMS suggests that such data sharing could reduce the burden when a change in health plans leads to a patient needing a new prior authorization.  

Interoperability reduces administrative costs of prior authorization

The CMS says that streamlining the burdensome prior authorization will pay off big time, potentially saving providers more than $15 billion between 2026 and 2035. Where do these savings come from?

Myndshft prior authorization software already uses the recommended FHIR APIs to facilitate a fluid exchange of data to enable: 

  • Real-time benefits eligibility and verification, discovery, and coordination
  • Point-of-care patient financial responsibility 
  • Hands-free prior authorization requirement verification, pre-check, electronic submission, and monitoring

We even offer payer-side clinical decision support and prior authorization auto-adjudication to further accelerate and strengthen decision-making. 

Want to see how Myndshft works? Connect with us to arrange a personalized demo