CMS’ Interoperability and Prior Authorization final rule (CMS-0057-F), released in early 2024, has begun its phased rollout as of January 1, 2026. The rule is designed to improve overall information exchange and access for patients, healthcare providers, and payors. While the rule primarily regulates payor procedures related to authorization automation, timeliness, and real-time information, the changes will also affect hospitals. This article explores how the rule will affect hospitals’ prior authorization processes and what they should do to prepare.
Which Payors Are Affected by the Interoperability & Prior Authorization Final Rule?
The rule applies to plans and programs including Medicare Advantage (MA), Medicaid fee-for-service (FFS), state Children’s Health Insurance Program (CHIP), Medicaid and CHIP managed care entities, and Qualified Health Plans (QHPs), per the CMS fact sheet.
How Will the Rule Affect Hospitals’ Authorization Workflows?
The prior authorization components of the rule include efforts to improve procedures, policies, and technology. Hospitals will face both direct and indirect effects from the regulatory changes taking place from January 1, 2026 through January 1, 2027, including changes to prior authorization workflows and opportunities to leverage automation and artificial intelligence (AI) resulting from new application programming interface (API) requirements. A summary of the timeline, impacts to the authorization process, and their effects on hospitals is included below:
| Date | Prior Authorization Rule Change | Impact to Hospitals |
|---|---|---|
| January 1, 2026 | Payors* are required to issue authorization decisions on “complete” submitted requests within a set time frame:
| Adhere to updated timelines and monitor payor adherence to rule changes. |
| March 31, 2026 | Payors* must publicly report prior authorization metrics, including:
| Utilize public reports to monitor authorization performance and payor denial rates. |
| January 1, 2027 | Payors* are required to provide Prior Authorization APIs for in-network providers that enable:
| Consider adapting workflows and structure to leverage payor APIs. |
*Payors impacted by the final rule
How Can Hospitals Prepare for Prior Authorization Changes?
Hospitals have and will continue to face an evolving operational environment as the final rule introduces significant mandates and revisions to information exchange and prior authorizations. The payor mandates to provide more real-time, structured electronic prior authorization details through APIs will increase possibilities for hospitals to use automation and AI to complete authorizations. In addition, payors not currently impacted by the rule may be impacted in the future if these requirements become the industry standard. Organizations should consider the following as they prepare.
Stay Up to Date
Hospitals should keep up with the latest payor announcements regarding how these regulations will be implemented and enforced. The changes are expansive, and actual implementation and adherence to the new requirements will vary significantly across plans and programs.
Modernize Care Access
Hospitals should adapt to these prior authorization changes as part of a broader goal to modernize how patients access care in a payor-driven environment. The move to electronic, standardized, and more automated workflows will be lengthy and complex to navigate.
Adapt Structures, Workflows, & Technology
Organizations and their revenue cycle teams should adapt their structures for the coming changes and migration toward the future, focusing on several key areas and departments:
- Patient Access: Enhance scheduling management and expedient intake of accurate patient information.
- Clinical Operations: Improve documentation timeliness, standardization, quality, and adherence to payor requirements.
- Managed Care: Expand efforts to enforce new payor requirements and monitor payor behavior through analytics.
- Information Technology: Establish strong IT governance, department collaboration, and automation knowledge to make automated and exception workflows a reality.
- Technology Infrastructure: Enhance or implement electronic health record (EHR), revenue cycle, and automation system infrastructure needed to drive improvements.
How Forvis Mazars Can Help With Hospitals’ Prior Authorization
Our healthcare and revenue cycle professionals are committed to helping organizations prepare and adapt to prior authorization and interoperability changes and other evolving regulatory requirements. If you have questions about how implementation of the final rule may affect your organization or how you can prepare, please reach out to our team today.