Analysis: Why are Payers and Providers Opposed to the New CMS Proposed "Administrative Simplification Rule"?

When it comes to healthcare policy, it's very rare to find an issue where provider organizations and #healthinsurance companies are in agreement. However, a section in the the recently proposed Administrative Simplification Rule for Healthcare Attachments evoked a rare joint letter from four of the largest voices in healthcare today--two provider organizations and two payer organizations.

The American Medical Association and American Hospital Association teamed up with AHIP and Blue Cross Blue Shield Association from the payer industry to write a letter urging that the proposed "electronic attachment standards" not be enforced. The rationale for the opposition was that, while the ruling did propose standardization based on 2016 standards, "there have been significant developments in both the technology and regulatory spaces in the intervening years.?"

In short, the industry wants to move toward Fast Healthcare Interoperability Standards (#FHIR). A separate ruling was finalized in late 2022--the Interoperability and Prior Authorization ruling provides a framework which enables data, not attachments to be shared, and requires both providers and payers supporting #medicareadvantage, #medicaid, #chip, and #mips to comply with a set of #applicationprogramminginterfaces (APIs) that support exchange of data between payer and provider systems. While there are several #apis in scope for the ruling, the key API is the Prior Authorization Requirements, Documentation and Decision (PARDD) API. Here's a snippet from the rule:

The API would streamline the prior authorization process by automating the process to determine whether a prior authorization is required for an item or service...The API would then be able to query the payer's prior authorization documentation requirements and make those requirements available within the provider's workflow as well as support the automated compilation of certain information from the provider's system. Finally, the API would support an automated approach to compiling the necessary data elements to populate the HIPAA-compliant prior authorization transactions and enable payers to compile specific responses.

In my first article in December, 2020 and several since, I've been highlighting the maturity of the #fhir standard and its adoption. The #healthcare industry is still young in its drive toward standardization compared to the #fintech industry; however, it does appear there is consensus among all portions of the sector that standardization, beyond basic #x12 transactions is finally beginning to take hold.