The interoperability community has been waiting with bated breath for the updated Prior Authorization proposal after the Trump administration’s late 2020 proposal was withdrawn due to concerns about costs and deadlines. The updated proposal was finally released earlier this week. The Centers for Medicare and Medicaid and Services (CMS) issued a proposed rule to implement  Health Level 7® (HL7®) Fast Healthcare Interoperability Resources® (FHIR) standards to support the streamlining of the prior authorization (PA) process for medical items and services and increase access to health information for patients and providers by 2026.

While the initial proposal only applied to Medicaid managed care, the Children’s Health Insurance Program (CHIP) and Affordable Care Act (ACA plans), the new proposal also applies to Medicare Advantage plans.  Starting January 1st, 2026, impacted health plans would be required to build and maintain a FHIR application programming interface (API) that can support electronic prior authorization. The FHIR API must identify whether a prior authorization request is required and facilitate the exchange of prior authorization request and decisions. Moreover, payers will have to include a specific reason when denying prior authorization requests, publicly report specific prior authorization metrics, and set requirements around prior authorization decisions. Hospitals and MIPS eligible clinicians will also be incentivized to adopt electronic prior authorization.

While the majority of proposals are aimed at streamlining the prior authorization process, the proposed ruling also, importantly, implements requirements to improve access to health data. These specific policies include:

What Health Plans and the Data Interoperability Community Need to Start Thinking About: FHIR is Just One Part of the Data Interoperability Equation

The CMS proposed ruling requires impacted payers to build and maintain a FHIR API in effort to improve the cumbersome and costly prior authorization process, further endeavoring to cement FHIR as the data standard to support future information exchange. Streamlining data sharing across payers, providers, and patients by improving the electronic exchange of healthcare data helps to advance data interoperability and further enable the development of more comprehensive longitudinal health records that can be used to improve the quality, safety, and efficiency of healthcare delivery.

There’s extraordinary value in data sharing. For healthcare professionals to create holistic, dynamic, and integrated healthcare plans they need accurate information they can trust – ideally before the patient walks into their office. Historically, that has been easier said than done. On average, patients see two different primary care providers, five different specialists from four practices each year.1 Unfortunately, the lack of communication and information being shared between providers caring for the same patient and providing access to that data to health plans adds to this complex care framework. As a result, Electronic Health Records (EHRs) often contain fragmented information that when used to make healthcare decisions, could cause avoidable hospital admissions, reduced medication adherence, and costly administrative inefficiencies.1 

These barriers to efficient data use coupled with health plans’ fervor to comply with the CMS Interoperability and Patient Access Final Rule, a requirement for certain payers to build standardized interfaces to exchange data with other payers, spurred the adoption of FHIR specifications in the healthcare industry. And while the battle to conquer data interoperability is advancing, for many organizations, the war to solve data quality issues is at a stalemate. 

As CMS continues to push FHIR as the standard to support data sharing and interoperability via government mandates, health plans will need a scalable FHIR strategy to help position their organizations for growth and agility in a rapidly evolving marketplace. Organizations are starting to realize that standardizing on the FHIR format is just one part of the equation. FHIR offers many benefits, but it doesn’t solve the challenge of deriving value from legacy clinical data that is fraught with inconsistencies in data collection and coding variations.

To effectively use clinical data as a strategic component of a FHIR strategy, the content that makes up the data and how it’s structured must be parsed, semantically normalized, enriched, and synthesized into a longitudinal health record. Conquering this feat of syntactic and semantic interoperability requires a set of specialized skills and capabilities to deliver value at scale. And if clinical data quality issues are not addressed as organizations seek to implement FHIR APIs and begin leveraging FHIR at scale, the very goal of the CMS proposal in streamlining and automating processes like prior authorization will fail.

In our latest Insight Brief, we discuss traditional barriers organizations must overcome to launch a successful FHIR strategy and how Diameter Health’s API-based Upcycling Data™ technology goes beyond FHIR conversion and even simple terminology mapping to ensure that multi-format clinical data is semantically normalized and ready to use in downstream workflows to support use cases like prior authorization.

Download Why FHIR is Not the Holy Grail of Data Interoperability to learn more.

1. “Kern, et al. “Patients’ and Providers’ Views on Causes and Consequences of Healthcare Fragmentation in the Ambulatory Setting: A Qualitative Study.” Journal of General Internal Medicine, U.S. National Library of Medicine, June 2019,