Final Rule Could Reduce Improper Prior Authorization Denials in Medicaid

A rule recently finalized by CMS may address widespread problems with Medicaid prior authorization identified in an HHS Office of Inspector General (OIG) report, industry experts say. However, they suggest that to truly solve the problem of improper coverage denials, states and Congress must limit managed care organizations’ leeway in such matters. 

The CMS Interoperability and Prior Authorization Final Rule, released on Jan. 17 and scheduled for publication in the Feb. 8 Federal Register, should help providers and patients better understand why a given request was rejected, experts tell AIS Health, a division of MMIT. The rule requires MCOs to share precise, specific reasons for denials and make those decisions faster. Most provisions in the final rule also apply to Medicare Advantage organizations, state Medicaid and Children’s Health Insurance Program fee-for-service programs, and Affordable Care Act plans sold on the federally facilitated exchanges. Additionally, the regulation includes interoperability and data transparency provisions.