On Jan. 17, the Centers for Medicare & Medicaid Services (CMS) announced the release of the CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F).

The rule aims to optimize the electronic exchange of health information and prior authorization processes for various medical items and services. Impacted payers under the rule include Medicare Advantage organizations, Medicaid and the Children’s Health Insurance Program (CHIP) fee-for-service programs, Medicaid managed care plans, CHIP managed care entities, and issuers of Qualified Health Plans (QHPs) offered on the Federally Facilitated Exchanges (FFEs).

“Increasing efficiency and enabling health care data to flow freely and securely between patients, providers, and payers and streamlining prior authorization processes supports better health outcomes and a better health care experience for all,” CMS Administrator Chiquita Brooks-LaSure said in an agency news release.

Beginning in 2026, all impacted payers, excluding QHPs on FFEs, must send prior authorization decisions within 72 hours for expedited requests and seven calendar days for standard requests. According to CMS, this new standard will reduce current decision timeframes by half for some payers. All impacted payers must also specify their reasons for denials of prior authorization requests and publicly report their prior authorization metrics. The initial set of metrics must be reported by March 31, 2026.

Impacted payers are required to implement a Health Level 7 Fast Healthcare Interoperability Resources Prior Authorization application programming interface (API) to automate the end-to-end prior authorization process.

“Together, these new requirements for the prior authorization process will reduce administrative burden on the health care workforce … and prevent avoidable delays in care for patients,” CMS writes in a news release.

Other APIs required by the final rule are a Provider Access API, Payer-to-Payer API, and Prior Authorization API. Certain operational provisions must be implemented by Jan. 1, 2026, while compliance with API policies will not be enforced until Jan. 1, 2027.

An Electronic Prior Authorization measure has been added under the Merit-based Incentive Payment System (MIPS) Promoting Interoperability performance category and the Medicare Promoting Interoperability Program. MIPS-eligible clinicians will begin reporting their use of payers’ Prior Authorization APIs in the calendar year 2027 performance period and calendar year 2029 MIPS payment year. Critical access hospitals will begin with the calendar year 2027 electronic health record reporting period.