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Prior Authorizations, 340B, and a National Provider Directory

December 14, 2022

For more information about this blog post, please contact Ryan L. O’Neill or Labinot Alexander Berlajolli.

CMS Proposes Streamlining The Prior Authorization Process

The Centers for Medicare & Medicaid Services (“CMS”) recently announced that it would issue a proposed rule seeking to streamline the prior authorization process, estimating that such changes will save hospitals and physician practices more than $15 billion over a 10-year period.

Changes under the proposed rule (CMS-0057-P) would generally apply to Medicare Advantage organizations, state Medicaid and Children's Health Insurance Program ("CHIP") agencies, Medicaid managed care plans, CHIP managed care entities, and qualified health plan insurers on the federally facilitated exchanges. Specific changes under the proposed rule include:

  1. Requiring the implementation of a Health Level 7 Fast Healthcare Interoperability Resources standard application programming interface to support electronic prior authorization;
  2. Requiring certain payers to include a specific reason when denying requests, publicly report certain prior authorization metrics and send decisions within 72 hours for urgent requests and seven calendar days for standard requests; and
  3. Adding a new electronic prior authorization measure for eligible hospitals and critical access hospitals under the Medicare Promoting Interoperability Program and for Merit-based Incentive Payment System eligible clinicians under the promoting interoperability performance category.

Additionally, CMS stated the proposed rule would also improve access to health data by (i) expanding the current patient access interface to include information about prior authorization decisions, (ii) allowing providers to access their patients' data by requiring payers to build and maintain a provider access interface, and (iii) requiring payers to exchange patient data using a payer-to-payer interface when a patient moves between payers or has concurrent payers.

CMS has issued a fact sheet summarizing the proposed rule and policy changes it is seeking under CMS-0057-P.

HHS Proposes Updates to 340B Updates

The U.S. Department of Health and Human Services (“HHS”) published a proposed rule (87 FR 73516) seeking to adjust its rules governing resolution disputes about overcharging, duplicate discounts and diversions. Specifically, the proposed rule seeks to enhance the efficiency of 340B dispute resolution by reducing formality and costs associated with the process as established under the 340B Administration Dispute Resolution (85 FR 80632) enacted in December 2020.

HHS has stated five goals in its proposed revision:

  1. Move the ADR process away from a trial-like proceeding and establish a more conventional administrative process;
  2. Revise the ADR panel structure to consist of 340B program subject matter experts from the Health Resources and Services Administration's Office of Pharmacy Affairs;
  3. Ensure parties attempt to resolve disputes in good faith prior to invoking the ADR process;
  4. Align the ADR process to statutory provisions on overcharges, duplicate discounts and diversion; and
  5. Include a reconsideration process for parties dissatisfied with the 340B ADR panel decision.

Comments are due by January 30, 2023.

CMS Proposes National Healthcare Directory

CMS published a Request for Information (87 FR 61018) on its plans to develop a national directory of healthcare providers and services. Describing the proposed platform as a “centralized data hub,” CMS envisions the national directory cutting administrative costs for healthcare providers while streamlining the process of connecting providers with patients.

Certain healthcare providers are already required by law to maintain online healthcare directories of providers and services. For example, in 2015, CMS established a requirement that Qualified Health Plan ("QHP") issuers on the Federally-facilitated Exchanges publish an easily-accessible, up-to-date, accurate, and complete provider directory online. Even when not required by law to establish a directory, providers participating in federal benefits programs who choose to establish a provider directory must ensure that their directory conforms to CMS’s marketing rules. Regulations at 42 CFR 422.111(b)(3), for example, require Medicare Advantage organizations to disclose a description of the number, mix, and distribution (addresses) of providers from whom enrollees may reasonably be expected to obtain services.


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Ryan Lee O'Neill

Ryan Lee O'Neill

Labinot Alexander Berlajolli

Labinot Alexander Berlajolli

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