CMS prior authorization final rule explained with AMA President Jesse M. Ehrenfeld, MD, MPH

. 12 MIN READ

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AMA advocacy scores a big win for prior authorization reform with the Centers for Medicare & Medicaid Services Final Prior Authorization and Interoperability Rule (CMS-0057-F). AMA President Jesse M. Ehrenfeld, MD, MPH, joins to break down the three reasons why this final rule is so important for patients and physicians and how it is expected to save practices $15 billion over the next decade. Plus, what’s ahead for AMA advocacy efforts on prior authorization reform in 2024. AMA Chief Experience Officer Todd Unger hosts.

Speaker

  • Jesse M. Ehrenfeld, MD, MPH, president, AMA

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Unger: Hello and welcome to the AMA Update video and podcast. Today, we're talking about an important win for physicians and patients in right-sizing prior authorization. And here with me to discuss the details is Dr. Jesse Ehrenfeld, president of the AMA. I'm Todd Unger, AMA's chief experience officer. Dr. Ehrenfeld, I'm so glad to have you back to talk about this important development.

Dr. Ehrenfeld: Well, I'm delighted to be here to share this amazing news that we've had—huge win for physicians.

Unger: Well, let's start with last week. The CMS final prior authorization and interoperability rule came out. And in it, there were some changes, really fixes to the prior authorization process that the AMA had long been advocating for. And before we get into the specific changes and what they mean, can you start by giving us some context on the significance of this win?

Dr. Ehrenfeld: Well, Todd, let me first say that the Centers for Medicare and Medicaid Services, CMS, they really did the right thing here. They listened to the AMA and based on our recommendation made some important reforms that were just long overdue. The need to right-size prior authorization has never been greater—mountains of administrative busywork, hours of phone calls, other clerical tasks that are tied to this onerous review process. It not only robs physicians of face time with patients, but studies show that it contributes to physician dissatisfaction and burnout.

And we know based on our own AMA research that overused prior authorizations have serious and sometimes deadly consequences. And while the payers claim that these requirements are used for cost and quality control, a third of physicians we surveyed report that prior authorization has led to a serious adverse event for a patient in their care, in their practice, whether it was somebody who got hospitalized, had a life-threatening event, became disabled or even died. And we just know this has to change.

And while there's a lot more we still have to do, the reforms that we're talking about today are a significant, significant step in the right direction. They're going to go a long way to reducing the burdens on physicians, and most importantly, reducing delays in care for our patients. And when you take this all together, these reforms are expected to save physician practices $15 billion over the next decade, a figure that is just hard to even fathom. And it's not possible to put a price tag on the relief that physicians and patients are going to get from these reforms.

Unger: You're absolutely right there. And it's quite a savings, not counting the relief part that you mentioned there. And it's going to undoubtedly have a major impact on physicians. Let's dig into some of the reforms. Although the rule itself is long, it's complicated, there are three main changes that physicians and patients need to know about. The first relates to technology, something you're expert in. Tell us more about that change and what it means.

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Dr. Ehrenfeld: So first, it's important to note that these changes only apply to government-regulated health plans—Medicare Advantage, Medicaid, Children's Health Insurance Program, fee-for-service programs, Medicaid managed care plans, and all of the health plans on federally facilitated exchanges. But those programs do cover an enormous number of patients. And we're hoping that more commercial insurers and employer plans follow suit.

So as you mentioned, some of the changes are technology-based. The new rule requires plans to do some really important things for patients. It requires plans to support an electronic prior authorization process that's embedded in the physician's electronic health records, bringing much needed automation and efficiency to our current very manual and very time-consuming workflow. That change is going into effect in 2027—it's going to be a game-changer for everybody.

I know firsthand the frustration that comes with having to spend hours on phone calls, playing phone tag, just to get approval for a treatment that I know, from my years of training, is the right thing for my patient. So having direct integration of prior authorization into the EHR is going to significantly reduce the burden on physicians. And this is where so much of that $10 to $15 billion in savings is going to come from.

Unger: That is really great news. And as you said, it's a change that's long overdue. I can hear you channeling that frustration level from physicians out there. You hear a lot about it, I'm sure. The next reform that I want to talk about is more operational. Tell us about that particular change and the impact that it's going to have.

Dr. Ehrenfeld: So another problem with the process is when you get a denial of a request, we often don't know why. You don't get told the reasoning behind the denial. And it can take hours and hours to appeal a decision. And then sometimes you wait weeks or even months for a peer-to-peer consult.

I got a text last night from a physician colleague in Florida, frustrated, because his dad—this is a physician. His dad is being denied over and over for a necessary service. So the CMS final rule is going to require insurers to provide specific, very specific denial reasons and public reporting of metrics. How often do they approve? How often they deny things? How long does it take a process to actually give a result for a request?

Insurers are also going to be required to share that information with patients. So the patients—our patients can become informed decision makers when they're buying health insurance out on the exchanges, when they're making planned decisions. That's going to begin in 2026 and will go a long way in bringing much needed transparency and accountability to the entire process.

Unger: I think you hit the nail on the head there. Metrics, transparency, accountability, that is huge. And it's such an important change. Dr. Ehrenfeld, what's the last significant change that we're going to be talking about today?

Dr. Ehrenfeld: So this is arguably the most important change because it's going to save lives. CMS is shortening the time frames for prior authorization decisions, which is going to reduce care delays for our patients. This also takes effect in 2026. And specifically, it's going to require payers to send a prior auth decision within 72 hours for expedited or urgent requests and seven calendar days—calendar days, not business days—for a standard request.

Now, we would have loved faster time frames—24 hours for urgent, 48 hours for standard. But this is a good first step. And we're certainly going to work with CMS with the hope that the agency is going to continue to update its policies in the future. It's also important to mention that enforcement of these policies, particularly around the Medicare Advantage payers, could potentially include sanctions from CMS, monetary penalties. So there is teeth behind this legislation and this rulemaking to make sure that we have enforcement and that the insurers play ball.

Unger: So we're looking at major reforms, major advance. Where do you think we go from here?

Dr. Ehrenfeld: Well, this is a huge win, but there's still a lot more work to be done both at the state and the federal level. As I mentioned, we're going to continue to work with CMS on this critical issue. We want to expand these improvements to drug prior authorization. And also at the national level, we're continuing to support the Improving Seniors Timely Access to Care Act, which would strengthen similar prior authorization reforms within the Medicare Advantage and potentially reduce those processing times I previously mentioned.

And we were able to secure enough co-sponsors on that bill to get through the House of Representatives in 2022. But unfortunately, it's been stalled in the Senate due to a flawed $16 billion cost estimate from the Congressional Budget Office. But this final rule could mean a big drop in the agency's $16 billion cost estimate for the legislation. So we think that this ups the odds that we get some congressional movement on this other important package.

Unger: Dr. Ehrenfeld, we've talked a lot about AMA and how we're working at the federal level. How are we working at the state level and helping?

Dr. Ehrenfeld: Well, look, momentum is building towards meaningful prior authorization reform across states. We continue to work closely with our partners across the Federation of Medicine. We provide model legislative language, talking points, data, other resources to advance reforms in legislatures across the U.S. And here we're making a difference, too.

More than 17 states have already adopted comprehensive prior authorization reforms. A lot of that's based on our model bills. That includes some good wins last year for patients and physicians in D.C., New Jersey, Arkansas and other states. With state legislative sessions just starting out, we're already seeing more than 70 bills of various types in more than 28 states being introduced this year.

And we're seeing concrete progress on reform in the private sector—Cigna, UnitedHealthcare, two of our nation's largest insurers. They outlined some voluntary efforts to reduce these prior authorization hassles. So remains to be seen how significant those changes are going to be.

But it's a victory for physicians. It's a victory for patients who have long been frustrated by excessive demand. The bottom line is that insurers know the pressure is on. Policy makers know the pressure is on. And the progress, it's not as fast as we want, but it's happening. And we can feel good about that.

Unger: Well, I have one other question for you. You've described a lot of work here. And behind all of this work, of course, are people, physicians, and the AMA advocacy team talking to legislators, going to Capitol Hill and pushing for change. Talk to us a little bit more about that work and the process and what it means to you personally.

Dr. Ehrenfeld: Well, Todd, the thing about advocacy, particularly in health care, is that you're in it for the long game. And there are very few quick wins. The changes we talked about today, we've been advocating for years. But the feeling that you get when all of that work leads to change and you get a win that's going to make such a huge difference for physicians and patients is indescribable.

And with prior authorizations in particular, it's our stories from our patients that get legislators attention and help them understand that these really are important complex issues. And more often than not, they too have had experience with delays themselves or family members. So when you come to them with a solution, you say this has to change. They understand the gravity and it helps them to act. And it's powerful, especially when you've got physicians, patients and legislators all fighting for the same thing.

Unger: That's absolutely right. You captured that so well. Dr. Ehrenfeld, what can physicians do who want to get more involved in such an important topic?

Dr. Ehrenfeld: Well, if they're not already, they can become an AMA member. We would love that. Advocacy is a huge part of what we do. And it's only possible because of our members. The more members we have, the more power we have to create change. And physicians can also learn about all of our prior auth work. They can share their stories at fixpriorauth.org. And we would encourage folks to check it out.

Unger: Again, that's fixpriorauth.org. Dr. Ehrenfeld, thank you so much for being with us here today, giving us your perspective, and of course for the many hours that you spend advocating for physicians and patients. I know we'll get to talk again soon. And I hope that we can talk about more wins.

That wraps up today's episode. You can support more programming like this, as well as the advocacy work Dr. Ehrenfeld mentioned by becoming an AMA member at ama-assn.org/join. We'll be back soon with another AMA Update. In the meantime, you can find all our videos and podcasts at ama-assn.org/podcasts. Thanks for joining us today. Please take care.


Disclaimer: The viewpoints expressed in this video are those of the participants and/or do not necessarily reflect the views and policies of the AMA.

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