In January 2024, the Centers for Medicare & Medicaid Services (CMS) finalized sweeping new rules aimed at improving the prior authorization process. These changes, set to take effect starting in 2026, will require most health plans to fundamentally rethink how they manage authorizations, interoperability, and member communication.

For health plans—including Medicaid managed care organizations (MCOs), Children’s Health Insurance Program (CHIP) plans, Qualified Health Plans (QHPs) on the Federally Facilitated Marketplace, and Medicare Advantage plans—the clock is ticking to prepare.

Here’s what you need to know—and how technology can help you stay compliant while improving operational efficiency.

Key Requirements of the CMS Final Rule

The CMS Prior Authorization and Interoperability Final Rule (CMS-0057-F) introduces several major mandates:

• Faster Turnaround Times:
  • Standard prior authorization requests must be processed within 7 calendar days (down from 14).
  • Expedited requests must be processed within 72 hours.
• Public Reporting:
  Plans must publish key prior authorization metrics, including approval/denial rates and average response times, on their websites annually.
• Improved Denial Communications:
  All prior authorization denials must include a specific reason, allowing providers and members to better understand the decision.
• Prior Authorization APIs:
  Plans must implement standardized FHIR APIs to allow providers to electronically submit prior authorization requests and receive decisions and documentation.
• Expanded Interoperability:
  Requirements extend to new areas like payer-to-payer data exchange, provider access APIs, and member access APIs to support better care continuity.

Implications for Health Plans

Meeting these requirements is not just about checking a box. Noncompliance can lead to audits, penalties, reputational harm, and potential disruption of member services.

Health plans must:

• Modernize legacy systems that cannot support FHIR-based APIs.
• Automate workflows to meet stricter processing deadlines.
• Improve internal and external transparency of authorization decisions.
• Enhance communication processes to deliver clear, CMS-compliant denial notices.
• Capture, report, and publish new operational data with accuracy.

For many plans, manual processes or disconnected systems will not be able to meet the new standards without significant disruption.

How Technology Can Help

The right technology platform can help health plans stay ahead of the regulatory curve while improving member and provider satisfaction. Key capabilities to look for include:

• Automation of Prior Authorization Workflows:
  Reduce administrative burden and accelerate decision-making.
• Built-in Compliance Features:
  Generate CMS-compliant denial letters automatically, track turnaround times, and support public metric reporting.
• FHIR-Ready Interoperability:
  Seamlessly exchange data with providers, members, and other payers using required FHIR APIs.
• Real-Time Visibility and Reporting:
  Monitor authorization status, turnaround times, and compliance indicators from a single platform.
• Audit-Ready Documentation:
  Maintain detailed records of authorizations, appeals, and decisions to streamline audits and support oversight.

Conclusion: Turning Compliance into Competitive Advantage

While the CMS Prior Authorization Final Rule brings significant operational challenges, it also creates an opportunity:
Plans that modernize their systems and streamline prior authorization processes can not only avoid penalties but also differentiate themselves through better provider relationships, member experience, and efficiency.

At InfoMC, our Incedo platform is built to help health plans automate prior authorization, support CMS compliance, enable FHIR interoperability, and improve care coordination—all while reducing administrative burden.

If you’re ready to modernize your prior authorization workflows and future-proof your operations, let’s connect.