CMS Interoperability Rule: What It Means for AI

The CMS Interoperability and Prior Authorization Final Rule is the most significant regulatory shift in health data exchange since the HITECH Act. It requires payers to implement FHIR-based APIs for patient access, provider directories, and prior authorization by 2026. For AI companies working in healthcare, this is a seismic opportunity — and a compliance minefield.

What the rule requires

At its core, the rule mandates that Medicare Advantage, Medicaid, CHIP, and Qualified Health Plan issuers expose patient data through standardized FHIR R4 APIs. Patients must be able to access their claims, encounters, and clinical data through third-party apps. Payers must also implement electronic prior authorization using FHIR, reducing approval times from weeks to hours.

The AI opportunity

Standardized APIs mean standardized data. For the first time, AI systems can consume claims and clinical data from multiple payers through a single interface. This unlocks use cases that were previously blocked by proprietary data formats: cross-payer analytics, automated eligibility verification, real-time prior authorization, and predictive modeling across a patient's complete payer history.

The compliance catch

Access to standardized data does not mean fewer rules. Every application that consumes FHIR APIs must comply with the same HIPAA requirements that govern any PHI handler. Apps must implement OAuth 2.0 for patient authorization, maintain audit logs of all data access, and sign BAAs with every payer whose API they connect to. The rule also introduces new requirements around patient education — users must be informed about how their data will be used before granting access.

For AI companies, the interoperability rule is an invitation to build — but only if you build compliance into the architecture from day one.