Compliance Readiness for CMS Interoperability Rule: Key Insights
The Workgroup for Electronic Data Interchange (WEDI) has released its latest survey findings on the industry's readiness for the Centers for Medicare and Medicaid Services' Interoperability and Prior Authorization Final Rule. This regulatory compliance mandate significantly impacts timelines, with deadlines set for January 1, 2026, and January 1, 2027, affecting payers, providers, and carriers across the board.
Compliance Deadlines and Requirements
A major requirement, soon to be effective, mandates a 72-hour decision window for urgent prior authorization requests and a seven-day window for standard requests, excluding medications. Affected payers include Medicare Advantage, Medicaid, the Children's Health Insurance Program (CHIP), and plans through the Affordable Care Act marketplace. By January 1, 2027, these payers must implement application programming interface (API) standards to enhance data accessibility for patients and providers.
Challenges and Progress in API Implementation
The WEDI survey reveals ongoing industry challenges in meeting these compliance deadlines. While progress is noted, such as the reduction of payers yet to start on API requirements from 50% in April to 43% now, substantial work remains. Among payers, 66% report they are at 25% or less completion for the Patient Access API, with only 12% expecting full readiness by the 2027 deadline.
Implementing these API components involves significant costs, mostly between $1 million and $5 million. Key challenges include digitizing prior authorization processes, adhering to regulatory compliance requirements, and collaborating with partners for system integration.
Provider and Vendor Readiness
Provider readiness is similarly lagging, with only 47% confident in meeting the 2027 API implementation deadline. Additionally, a significant number, 47%, have yet to start necessary integration and testing procedures. Financial uncertainty is widespread, with 55% unclear about cost estimates for compliance and training. Moreover, disparity exists in expected API interactions during patient care, with 19% anticipating direct clinician involvement.
Providers face challenges in developing new workflows, securing the necessary expertise, and coordinating testing with vendors and payers. Among vendors, 67% plan to assist payers and providers in complying with these new regulations, a decrease from the previous survey's 84%. The transition to new technologies and digital transformation remain industry-wide challenges.
Technological Integration and Industry Implications
The overarching trend, driven by the CMS rule announced in January 2024, aims to reduce operational burdens by shifting towards electronic prior authorizations. The survey underscores the need for technology integration and process adaptation as the 2027 deadline approaches, highlighting the importance of effective risk management in the insurance industry.