Published earlier this month, the Centers for Medicare & Medicaid Services (CMS) “Contract Year 2024 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly” Final Rule (CMS-4201-F)[1] (“2024 Final Rule”) enacted a number of enhancements to the Medicare Advantage (MA) program, including highly anticipated changes to prior authorization requirements for MA plans. Prior authorization, which requires providers or enrollees to submit a request for coverage for certain services (or items) to an MA plan for the purpose of confirming the necessity and resultant plan coverage of the requested service before it can be rendered, is one of a variety of utilization management (UM) tools used by MA plans to manage cost “manage cost, service utilization, and quality by ensuring that only medically necessary care is provided.”[2] However, this process has been highly scrutinized by industry stakeholders and government watchdogs in recent years, punctuated by an April 2022 Office of Inspector General (OIG) report[3] citing concerns about MA plans’ inappropriate denials of such requests and imploring CMS to clarify its guidance and increase its oversight.
In the 2024 Final Rule, CMS finalized such changes, including but not limited to the following provisions related to prior authorization in the MA program:
- “Prior authorization policies for coordinated care plans may only be used to confirm the presence of diagnoses or other medical criteria and/or ensure that an item or service is medically necessary based on standards specified in [the 2024 Final Rule].”[4]
- “An approval granted through prior authorization processes must be valid for as long as medically necessary to avoid disruptions in care in accordance with applicable coverage criteria, the patient’s medical history, and the treating provider’s recommendation.”[5]
- MA organizations must grant “a minimum 90-day transition period when an enrollee who is currently undergoing an active course of treatment switches to a new MA plan.”[6]
- “MA plans must comply with national coverage determinations (NCD), local coverage determinations (LCD), and general coverage and benefit conditions included in Traditional Medicare laws.”[7]
- “[W]hen coverage criteria are not fully established in Medicare statute, regulation, NCD, or LCD, MA organizations may create publicly accessible internal coverage criteria that are based on current evidence in widely used treatment guidelines or clinical literature.”[8]
- “When additional, unspecified criteria are needed to interpret or supplement general provisions… MA organization[s] must demonstrate that the additional criteria provide clinical benefits that are highly likely to outweigh any clinical harms, including from delayed or decreased access to items or services.”[9]
- “MA plans must establish a Utilization Management Committee to review all utilization management, including prior authorization, policies annually and ensure they are consistent with the coverage requirements, including current, traditional Medicare’s national and local coverage decisions and guidelines.”[10]
- Requiring organization determinations to be “reviewed by a physician or other appropriate health care professional with expertise in the field of medicine or health care that is appropriate for the services at issue”[11] when the plan “expects to issue a partially or fully adverse medical necessity… decision based on the initial review of the request.”[12]
The industry comments documented by CMS throughout the 2024 Final Rule evidence mixed support for the now-finalized provisions. Supporters applauded CMS for acting upon the OIG’s recommendations and taking steps to reduce what they see as barriers to medically necessary care. Critics, however, expressed concerns with the implementation logistics and timing of the changes, with many suggesting CMS delay the effective date of such changes to align with future rulemaking related to interoperability.[13] While it did modify some of its proposed provisions in response to industry comments on the previously proposed rule, CMS, reiterating feedback received from the OIG and other industry stakeholders about the need for clarified guidance and transparency, is moving forward with the finalized provisions to take effect January 1, 2024.
With an effective date looming at the start of the next contract year, MA plans must act now to successfully comply with the revised regulations come January 1. While certain aspects of the updated requirements may already be in place for many organizations (for example, many organizations already have an established UM committee as a result of National Committee for Quality Assurance (“NCQA”) accreditation requirements), plans must ensure that they are not only taking action to define and implement new processes but that they are also reviewing and updating existing processes to ensure full compliance with the provisions of the 2024 Final Rule. Actions to be taken may include but are not limited to:
- Reviewing and updating UM policies and procedures.
- Reviewing and updating coverage criteria.
- Establishing a charter, membership, and cadence for the UM committee.
- Obtaining UM committee approval of updated UM policies and procedures.
- Updating documentation and/or system templates utilized during prior authorization decision making.
- Re-training administrative and clinical staff on updated requirements.
- Updating claims adjudication processes and logic to forego prior authorization requirements for new enrollees undergoing active courses of treatment during their transition period.
- Designing and implementing focused oversight activities to validate compliance with updated requirements.
In addition to coordination between the plan’s Compliance and impacted business departments, preparations to comply with the new requirements must also engage the external entities with which the plan contracts in support of its prior authorization processes. This includes entities to which the plan delegates prior authorization functions (CMS, in response to industry comments, states in the 2024 Final Rule that “any [utilization management] policy or procedure that is used by the plan, whether developed or managed by a third-party entity, must be reviewed and approved by the UM committee”).[14] It also includes any vendors of coverage criteria products used by the plan, such as InterQual and MCG, which are commonly used and specifically discussed by CMS in the 2024 Final Rule and whose criteria are not exempt from CMS requirements.
As noted throughout the 2024 Final Rule, plans can expect CMS to evaluate implementation of the new requirements through existing oversight channels, including program audits, account management activities, and review of complaints. As observed with past regulation changes, plans undergoing program audits in 2024 will likely see increased scrutiny and focus in this area as CMS evaluates compliance with its new requirements and continues to gather information for future rule making.
[1] Available at https://www.govinfo.gov/content/pkg/FR-2023-04-12/pdf/2023-07115.pdf.
[2] "Contract Year 2024 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly" Final Rule (CMS-4201-F); April 12, 2023, at p.22185.
[3] See “Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care” (OEI-09-18-00260); April 2022. Available at https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf.
[4] “Contract Year 2024 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly Final Rule” (CMS-4201-F); April 12, 2023, at p.22121-22122.
[5] Id at p.22122.
[6] Ibid.
[7] Ibid.
[8] Ibid.
[9] Ibid.
[10] Ibid.
[11] Id at p.22224.
[12] Ibid.
[13] See “Medicare and Medicaid Programs; Patient Protection and Affordable Care Act; Advancing Interoperability and Improving Prior Authorization Processes for Medicare Advantage Organizations, Medicaid Managed Care Plans, State Medicaid Agencies, Children's Health Insurance Program (CHIP) Agencies and CHIP Managed Care Entities, Issuers of Qualified Health Plans on the Federally-Facilitated Exchanges, Merit-Based Incentive Payment System (MIPS) Eligible Clinicians, and Eligible Hospitals and Critical Access Hospitals in the Medicare Promoting Interoperability Program” Proposed Rule (CMS-0057-P); December 13, 2022. Available at https://www.federalregister.gov/documents/2022/12/13/2022-26479/medicare-and-medicaid-programs-patient-protection-and-affordable-care-act-advancing-interoperability.
[14] “Contract Year 2024 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly” Final Rule (CMS-4201-F); April 12, 2023, at p.22216
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