AHA Urges CMS to Finalize Prior Authorization Reform Rule and Eliminate Roadblocks

The American Hospital Association (AHA) is urging the Centers for Medicare & Medicaid Services (CMS) to finalize its proposed Prior Authorization Requirements, Documentation and Decision (PARDD) rule and to eliminate roadblocks to the implementation of technological solutions that could streamline the prior authorization process.

In a letter to CMS Administrator Chiquita Brooks-LaSure, the AHA commended the agency for taking action to address the significant burdens that prior authorization creates for patients and providers. The AHA also expressed its strong support for the agency’s proposal to create interoperable prior authorization standards.

However, the AHA also raised concerns about the requirement to transfer FHIR payloads into and out of the X12 278 standard. The AHA argued that this requirement is a “substantial and wholly unnecessary roadblock inhibiting the transformation of prior authorization processes.”

The X12 278 is a legacy standard that is not well-suited for electronic prior authorization. It is complex, inefficient, and does not support the full range of capabilities that are available through FHIR API technology.

The AHA urged CMS to revisit the requirement to use the X12 278 standard and to allow providers and payers to fully leverage the capabilities of modern API technologies.

Why is this important?

Prior authorization is a process in which healthcare providers must obtain approval from health plans before providing certain services to patients. The process can be complex and time-consuming, and it can lead to delays in care and frustration for both patients and providers.

The AHA argues that the PARDD rule would help to streamline the prior authorization process and make it more efficient for both providers and payers. The rule would also require health plans to provide more transparency about their prior authorization requirements and to make it easier for providers to submit prior authorization requests electronically.

The AHA’s concerns about the X12 278 standard are shared by many other stakeholders in the healthcare industry. The standard is seen as a major barrier to the adoption of electronic prior authorization solutions.

Prior authorization issues reported by the AHA 

• Patient care delays: Prior authorization can lead to delays in care for patients, which can have serious consequences for their health. For example, the AHA cited a case where a patient’s cancer treatment was delayed because their health plan required a new prior authorization for each treatment.

• Provider burden: Prior authorization requirements can be a significant burden on providers, diverting time and resources away from patient care. The AHA reported that 95% of hospitals and health systems have seen an increase in the amount of staff time spent seeking prior authorization approval from health plans in the past year.

• Lack of transparency: Providers often have difficulty understanding which services require prior authorization and what documentation is required from health plans. This can lead to delays and denials of care.
• Varying and inefficient submission methods: Health plans have different requirements for submitting prior authorization requests, which can be confusing and time-consuming for providers. 

• Maintains an unnecessary roadblock: The AHA believes that maintaining the HIPAA X12 278 standard for prior authorizations is an unnecessary roadblock that inhibits the transformation of prior authorization processes.

• Limits the capabilities of modern API technologies: Providers and payers are most likely to succeed in working together to automate prior authorization processes if they are empowered to fully leverage the capabilities of modern API technologies.

• Administrative burden: The current X12 278 standard has proven insufficient in promoting increased administrative efficiencies. Translating FHIR payloads to the X12 278 transaction increases burden and limits FHIR enhancements unsupported by the X12 278 standard.

• Creates vulnerabilities: The requirement to utilize the X12 278 transaction has hindered the design and development of FHIR-based standards by industry stakeholders. CMS’ current proposal to maintain the X12 278 standard would perpetuate this challenge.

• Perpetuates technical complexities: The needless translation into and out of the X12 278 transaction will require an intermediary between the provider’s and the payer’s FHIR-based systems. This will add extra steps and costs to the process and make the transaction more vulnerable to errors.

• Hinders innovation: The AHA believes that the mapping between FHIR and the X12 278 is problematic and incomplete. There is no comprehensive and operational mapping between FHIR and the X12 278, and the unfinished mapping available at present has not been properly vetted or tested.

 What can be done?

The AHA is urging CMS to finalize the PARDD rule and to eliminate the requirement to use the X12 278 standard. The agency can also work with stakeholders to develop new standards and tools that support the electronic exchange of prior authorization data.

Providers and payers can also take steps to streamline the prior authorization process. For example, they can adopt electronic prior authorization solutions and work together to develop common prior authorization requirements.

The AHA’s letter to CMS highlights the need for prior authorization reform and the importance of technological solutions. By working together, stakeholders in the healthcare industry can make the prior authorization process more efficient and less burdensome for patients and providers.