Piece by piece, nursing home operators are seeing stricter government oversight of Medicare Advantage (MA) plans, a welcome relief given that partnerships with such managed care plans have become a huge source of administrative burden for providers in the sector, especially as workforce shortages persist.
Most recently, the Centers for Medicare & Medicaid Services (CMS) in January published its Interoperability and Prior Authorization final rule alongside a proposed payment update for MA and Part D plans. The changes outlined in the federal agency’s final rule aim to streamline prior authorizations and promote easier electronic health record exchanges between providers and insurance plans, while also holding payers more accountable for denials.
Impacted payers, including Medicare Advantage plans, are now required to review standard prior authorization requests within seven calendar days – expedited requests need to be reviewed within 72 hours. Providers must also adopt a new measure, which would encourage more efficient electronic prior authorization processes.
LeadingAge Vice President of Integrated Services & Managed Care Nicole Fallon told Skilled Nursing News that the rule marks “notable changes and advocacy successes,” helping providers and beneficiaries by adding greater transparency into plans’ decisions in key areas like prior authorization.
“We advocated to CMS to shorten these timeframes in our comments. Any delay in these decisions often leaves the patient languishing in the hospital unnecessarily,” Fallon told SNN.
Additional CMS rules around MA plans come after the industry critiqued the federal agency’s previous efforts to oversee MA plans, calling these efforts out for a “lack of teeth” and clarity. CMS had started taking steps to ensure that patients were not inappropriately denied coverage as far back as 2022, with a proposed rule stating that MA organizations (MAOs) generally cannot apply coverage criteria that is more restrictive than traditional Medicare, or divert care to home health.
A couple years of lead time
Impacted plans must implement certain operational provisions beginning Jan. 1 2026, but have until Jan. 1, 2027, to enhance their application programming interfaces (APIs), which are computer programs at health care facilities that allow electronic health records to “talk to” the MA plan’s health records, in turn making the prior authorization process more efficient. “Exact compliance dates vary by the type of payer,” CMS said in its guidance.
“Nursing homes should continue to watch for how the APIs develop as they may simplify the prior authorization processes and may create access to health information on the people they serve from the plans,” said Fallon. “We are monitoring this closely to get greater insight on other aspects of the final rule’s impact on nursing home providers.”
Also beginning in 2026, CMS is requiring payers to provide a specific reason for denying prior authorization decisions, regardless of the method used to send a prior authorization request, CMS said. Prior authorization decisions concerning drugs is the exemption, the agency said.
This is another item nursing home associations have been advocating for, Fallon noted, since it may help expedite reconsiderations. For example, if documentation is missing, it might be a matter of submitting one more piece of data on the patient to get approval.
Payers may also need to provide information about the denial to providers, patients or both, per existing requirements. Prior authorization metrics must also be published on payer websites, CMS said.
Under the new regulations, Medicare Advantage plans among other payers are required to implement and maintain certain Health Level 7 (HL7) Fast Healthcare Interoperability Resources (FHIR) used in the electronic exchange of health care data.
Step in the right direction
The American Health Care Association and National Centers for Assisted Living (AHCA/NCAL) approved of the final rule, calling it a “clear step in the right direction” coupled with the CY2024 Medicare Advantage final rule’s prior authorization and utilization management provisions.
HL7 FHIR changes will streamline the prior authorization process, the agency said, and adds to initial groundwork put in place May 2020 regarding tech and prior authorizations.
Industry advocates applaud the changes put in place by the federal agency to oversee MA plans.
“AHCA/NCAL supports the rule’s intent to enhance the efficiency and transparency of data exchange between patients, providers and payers,” the association said in an email to Skilled Nursing News. “AHCA/NCAL remains committed to guiding our members and provider-owned plans impacted by the final rule toward operationalizing best practices.”
The rule includes beneficiary protections and enhancement of beneficiary access to care, AHCA/NCAL said in a statement, calling the move a positive for both providers and residents.
And, it’s the only way industry representatives can identify where there are true problems between MA plans and the skilled nursing industry, and begin to address them, according to previous reports.
On the heels of the prior authorization and interoperability rule, CMS issued its 2025 Medicare Advantage proposed rule to increase payments for such plans and Medicare Part D by 3.7%, or more than $16 billion from 2024 to 2025.
MS plans have said it’s more of a net reduction with risk scores not being met. It’s effectively a cut because the increase doesn’t match the increase in risk scores by 3.86%, they said.
“The [MA] plans are framing this as a net reduction, 0.16%,” Fred Bentley told Skilled Nursing News. Bentley serves as managing director for ATI Advisory’s post-acute and long-term care and senior living practice.
MA plan payment and regulatory changes are also happening at the same time as expansion and parity on appeals rights among MA beneficiaries – CMS is looking to better integrate care for dual eligible patients specifically.
The appeals process would be out of the managed care plan’s hands and under the purview of the quality improvement organization (QIO), and appeals for non-hospital services would be fast tracked, Bentley said. It’s a process closer to what Medicare Fee-for-Service (FFS) beneficiaries) experience.
Publicly available metrics, new MIPS measure
Another big change in the rule concerns prior authorization metrics. Payers, including MA plans, must publicly report certain prior authorization metrics annually, posting them on their website, CMS said in the rule.
The agency has a compliance date of Jan. 1, 2026, with an initial set of metrics that must be reported by March 31, 2026.
“This transparency is an important step in better understanding whether this tool is delaying care unnecessarily,” said Fallon. “The rules don’t require the data to be reported on the Medicare plan finder at Medicare.gov but instead on individual plan websites. While this could make it more difficult for beneficiaries to find, the good news is that it must now be publicly available.”
MA plans will have to put together an API specifically for prior authorizations, and put it into practice by 2027. CMS hopes this will make it easier for SNF operators to exchange data and documentation they need to provide to plans for these prior authorizations.
“We are, of course, hopeful that the prior authorization API will reduce administrative burdens on providers and home health agencies, so we are keeping close watch on how enforcement plays out,” said Fallon.
Providers will still need to navigate the time-consuming plan policies and practices, she added, since each MA plan will have its own API.
Other APIs to be developed by MA plans include interfaces that would allow the plans to exchange information with patients, and with other plans when a beneficiary changes coverage.
Moreover, electronic prior authorization will need to be reported beginning with the 2027 performance period and/or the 2029 Merit-based Incentive Payment System (MIPS) payment year as well.
This will be an “attestation measure,” CMS said. Clinicians or eligible hospitals must attest “yes” to requesting a prior authorization electronically via the prior authorization API, and using data from certified health records for at least one medical item or service, drugs excluded, ordered during the 2027 performance period.