CMS Finalizes Rule Setting Prior Authorization Deadlines for Payers

The Biden administration moved Wednesday to force insurance companies to give specific reasons for denying coverage, and to speed up the pre-approval process in general. The new rule applies to health insurance companies that offer Medicare, Medicaid, Children’s Health Insurance Program, and Obamacare plans but not commercial plans. The rule concerns so-called prior authorization requests and will require insurers to return urgent requests within 72 hours and non-urgent requests within seven days.  Under the rule, payers must also report prior authorization metrics annually.

All told, the agency expects the changes will result in approximately $15 billion in savings over 10 years by reducing the health care system's administrative burden and improving health outcomes, noting that decision timelines for some payers will be halved.