Federal Rule to State Reality & National Impact: How MHDC Is Shaping Prior Authorization
This episode of The Dish on Health IT features guest, Denny Brennan, Executive Director of the Massachusetts Health Data Consortium (MHDC), in conversation with host Tony Schueth, CEO of Point-of-Care Partners (POCP), and co-host Ross Martin, MD, Senior Consultant with POCP. Together, they examine how MHDC is translating national interoperability policy into practical, statewide action, specifically around the CMS 0057 rule.
After brief introductions, the conversation quickly turns to MHDC’s long history and why it matters. Founded in 1978, before the internet, MHDC guided Massachusetts through nearly every major health IT transition: HIPAA, Meaningful Use, ICD-10, and now interoperability and automation. Denny explains that this continuity has created something rare in healthcare: sustained trust across payers, providers, vendors, regulators, and associations. That trust, he notes, is what allows competitors to work through shared infrastructure problems that no single organization could solve on its own.
From there, the discussion turns to why the MHDC community chose to coordinate and support members in their CMS-0057 compliance journey, versus just letting each member organization go it alone. Denny emphasizes that while healthcare is regulated federally, it functions locally. Each state has its own mix of insurers, hospital systems, rules, and market pressures. In Massachusetts, where long-standing relationships already exist, MHDC saw an opportunity to move faster, test real workflows, and generate lessons that could inform efforts far beyond the state.
The discussion then moved to how work to improve prior authorization became such a high-priority focus. Denny describes how the process has grown into one of the most disruptive administrative burdens for clinicians. Rules vary by plan, criteria change frequently, and the information providers need is often hard to access in real time. The result is defensive behavior. Offices routinely submit prior authorizations “just in case,” often by fax or phone, simply to avoid denials and treatment delays. That inefficiency, he explains, ripples outward by slowing patient care, driving up providers' overhead, and requiring health plans to spend more time and resources processing and reviewing the required PA alongside the unneeded submissions.
The financial impact quickly becomes apparent. Denny points to evidence showing that administrative costs consume a massive share of U.S. healthcare spending, with prior authorization playing a meaningful role. If automation is implemented through a neutral, nonprofit infrastructure, MHDC believes there is a much greater chance that savings will flow back into premiums and public program costs rather than being swallowed by inefficiency.
Ross adds an important dose of realism. Prior authorization friction, he notes, is not always accidental. In some cases, operational complexity functions as a utilization control mechanism. That creates a built-in tension between access, cost containment, and patient experience, and helps explain why national reform has moved slowly despite widespread frustration.
At that point, the conversation shifts from why this is broken to how MHDC is trying to fix it. Denny walks through MHDC’s operating model: convene the full ecosystem early and often. In a recent deep-dive session, roughly 60 representatives from health plans, providers, and the state participated in a working session focused on what an automated prior authorization workflow could realistically look like. MHDC brought a draft framework to the table. The community pressure tested it and surfaced workflow conflicts, operational blind spots, and policy misalignments that no single organization could see on its own.
That collaborative process, Denny explains, is the real engine behind adoption. When stakeholders help build the solution themselves, implementation becomes a shared commitment rather than a compliance exercise. It also reduces resistance later because decisions are not delivered top-down. They are constructed collectively.
The discussion then turns to FHIR adoption and why, while real, progress has taken time. Denny traces the turning point back to the 21st Century Cures Act, which reframed patient access to health data as a legal right and categorized data blocking as a regulatory violation. That policy shift, combined with the growing maturity of API-based interoperability, created the conditions for real-time data exchange to finally move from theory to practice.
Ross provides a historical perspective from the standards side. Earlier generations of health data standards were conceptually elegant but extremely difficult to implement consistently. FHIR changed that equation by aligning healthcare data exchange with the same API-driven architecture that supports the modern web. He points to accelerating real-world adoption, particularly from large EHR platforms, as evidence that FHIR has entered a phase of broad, practical deployment.
Although pharmacy prior authorization falls outside the formal scope of CMS 0057, Denny makes clear that MHDC could not ignore it. For many physicians, especially in oncology, dermatology, and primary care, PA for prescriptions is far more frequent and far more disruptive than PAs for medical services. If MHDC solved only one side of the problem, much of the daily burden for clinicians would remain unchanged.
Pharmacy prior authorization, however, introduces a new level of complexity. PBMs, pharmacists, prescribing systems, payers, and patients are all involved, often across fragmented workflows. Denny explains that the challenge looks less like a pure technology gap and more like an orchestration problem. It is about getting the right information to the right party at the right moment across multiple handoffs.
Ross shares insights from the pharmacy PA research work conducted with MHDC and POCP. One of the most striking findings was the massive year-end renewal surge that hits providers every benefit cycle as authorizations tied to prior coverage suddenly expire. He also reflects on a recent national electronic prior authorization roundtable, where deep stakeholder discussion ultimately led most participants to conclude that today’s technology alone still is not sufficient to fully solve pharmacy PA. The tools are improving, but the problem remains deeply multi-layered.
As the episode winds down, the tone shifts toward practical calls to action.
Denny challenges the industry to separate where competition belongs from where collaboration is essential. Contract negotiations may be adversarial by nature, he notes, but interoperability initiatives cannot succeed under the same mindset. Real progress depends on bringing collaboratively minded people into the room. These are people willing to solve shared infrastructure problems even when their organizations compete elsewhere.
Ross builds on that message with a longer-term challenge: sustained participation in standards development. Organizations cannot sit back and hope others shape the future on their behalf. Active involvement in national standards organizations is critical. This is not for immediate quarterly returns, but to influence the systems everyone will be required to use in the years ahead.
The episode closes with a clear takeaway. MHDC did not wait for perfect conditions. It moved when the pieces were good enough, tested real workflows with real stakeholders, adjusted in the open, and began sharing lessons nationally. In an industry often slowed by fragmentation and risk aversion, this conversation offers a grounded look at what forward motion actually looks like when collaboration, policy, and technology finally align.
You can find this and other episodes of The Dish on Health IT wherever you get your podcasts, including Spotify and Healthcare Now Radio. If you found this conversation valuable, share it with a colleague and be sure to subscribe so you never miss an episode. Have an idea for a topic you would like us to cover in future episodes? Tell us about it by filling in the form on the main podcast page. Until next time, Health IT is a dish best served hot.
Prefer video? Catch episodes on the POCP YouTube channel
