CMS Announces Plans to Change Prior Authorization Rules

February 2020 ~

CMS Administrator, Seema Verma, on February 11, announced the agency’s intent to reform prior authorization regulations later this year. According to Verma, the changes “will reduce administrative waste, increase patient safety and free physicians to spend time caring for their patients.”

At the American Medical Association National Advocacy Conference in Washington, D.C., Verma said, in 2020, CMS’ “efforts around innovation and reducing burden will involve another long-standing problem in the health care system…. prior authorization. The prior authorization process became indefensible years ago. Patients are frustrated and doctors are sick of pointlessly wrangling with insurance companies. Prior authorization requirements are a primary driver of physician burnout, and even more importantly, patients are experiencing needless delays in care that are negatively impacting the quality of care they receive.  While prior authorization is an important utilization management tool, we believe we can use automation to make the process more efficient. This is a priority for us. We have conducted 35 listening sessions and elicited over 2,000 stakeholder comments. We appreciate all of your input.  The Trump Administration is once again ready to take action to support doctors and patients. We will reduce administrative waste, increase patient safety, and free physicians to spend time caring for their patients.”

Verma also states that the “Administration is also bringing transformational change to the Medicaid program,”  noting that Medicaid is the number one or two budget item for states, yet, “for all that spending, health outcomes today on Medicaid are mediocre and many patients have difficulty accessing care.” Verma reminded the audience that the Healthy Adult Opportunity (HAO) is voluntary, does not cut Medicaid funding to states that do choose to participate, and offers states greater flexibility to improve the health of their Medicaid populations.

Verma continued, “Price transparency is arguably the most consequential change to the health system in decades. As doctors, you want to be able to order a test or prescribe a treatment without unwittingly impoverishing your patients… you want to make referrals based on cost and quality.  It’s impossible to justify keeping you and your patients in the dark about pricing. Under the leadership of President Trump, large hospital systems and insurance companies won’t be allowed to obscure these prices for much longer.

But innovation involves moving to a value-based payment system. Today, only 20 percent of clinicians in Medicare are taking on significant levels of risk. To this end, CMS has been developing a new cadre of payment models and a strategy to increase provider participation. Recognizing that not every provider is comfortable taking full risk, we are offering new opportunities that ease providers into value-based agreements and delivery options that work for them. Clinicians should be allowed to focus on caring for patients rather than tracking their revenue cycle. We look forward to working with the AMA on how we can support providers in moving towards value-based care.”


ource(s): CMS Press Release; HMA Weekly Roundup, February 19, 2020; Modern Healthcare; Becker’s Hospital Review;