The Interoperability and Prior Authorization Final Rule: A Significant Opportunity for Health Plans

By Kim Ingram, SVP Clinical Innovation, Excell Healthcare Advisors

Every so often, the Centers for Medicare & Medicaid Services (CMS) issues requirements that hold the potential to transform healthcare. The CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F) is one such mandate.

If approached the right way, with a human-focused perspective, CMS-0057-F could be a tremendous opportunity for health plans to:

• Simplify and optimize prior authorization processes
• Enhance member satisfaction
• Reduce provider abrasion

That’s not to say the transformation will come automatically. After years serving as a Chief Nursing Officer, clinical strategy executive, and clinical innovation executive, I understand the numerous practical challenges involved in initiatives like this one. But as a healthcare consumer, like all of us, I’ve also experienced situations that highlight why it’s so important.     

The key thing to remember is that the technology demanded by the final rule will deliver only limited benefits on its own. Just as with most things in healthcare, health plans will derive true value not from the technology alone, but from the process and behavioral changes it enables for the people involved.

In a nutshell, the final rule instructs certain health plans to implement defined Application Programming Interfaces (APIs) by Jan. 1, 2027. Medicare Advantage (MA) plans, Medicaid managed care plans, and Medicaid fee-for-service (FFS) plans are among those that must comply.

The rule entails several types of APIs. However, it’s the prior authorization API and its associated process adjustments that may be highly beneficial for health plans. The prior authorization API must:

• Be populated with a list of covered services/items
• Identify documentation requirements for prior authorization approval
• Support prior authorization requests and responses

In conjunction, impacted health plans must send prior authorization decisions within 72 hours for urgent requests and within 7 calendar days for non-urgent requests (with the possibility of an extension to 14 days in certain circumstances).

The goal of CMS-0057-F’s prior authorization components is to simplify this key healthcare process.

Consider this: Only about 30% of the requests received by a typical health plan actually need prior authorization. By increasing interoperability and transparency, the final rule’s provisions should make it easier for providers and members to:

• Determine if prior authorization is required
• Know which documentation and data are necessary for prior authorization
• Submit a prior authorization request and receive a response

Likewise, health plans should find that this helps proactively surface the right information, subsequently reducing administrative burdens, streamlining utilization management (UM) workflows, and enabling clinicians to work at the top of their license. Some health plans I’ve worked with recently have seen a 15% reduction in incoming fax volume just from automating responses to “Is prior authorization required?” They have also noticed significant declines in requests for additional information because the incoming data is a more holistic package.

Best of all, easing and shortening the “information-to-impact” timeline should enhance the member experience, strengthen provider relationships, and drive impactful outcomes.  

CMS-0057-F may deliver sizable advantages, but there is work to be done to accomplish them.

As I’ve helped health plans at various stages of implementation, it’s clear how big this shift is for the industry. Much of it has never been done before. For UM staff, the revamped processes are vastly different.

Still, complying with the final rule and capturing its benefits are possible with approachable innovation that combines modern technology with business transformation expertise. This means taking a human-centered approach to creating workflow efficiencies and upskilling staff, while optimizing impact by harnessing an interoperability layer and agentic AI technology capabilities. 

Excell Healthcare Advisors and Medecision understand that health plans will ultimately achieve the greatest value from this transition when technology, data, and human-centered processes work together collaboratively—not in siloes—to ensure a friction-free evolution. From information to impact, health plans, providers, and members can become genuine partners in the shared quest to improve outcomes.

Kim Ingram is Senior Vice President of Clinical Innovation at Excell Healthcare Advisors.