CMS Issues New Rules for Prior Authorization Under the Medicare Advantage Program

On April 12, the Centers for Medicare & Medicaid Services (CMS) published a final rule that establishes long-sought standards that Medicare Advantage (MA) plans must follow when they use prior authorization and other utilization review techniques to administer healthcare claims, including claims for O&P care. Given the fact that the MA program covers more than half of all patients with Medicare coverage, this is a major advance for providers and patients, whose care is often inappropriately delayed or denied through prior authorization and similar MA tactics, all designed to boost profitability of these plans. The final rule is effective on June 5, but the rule states that the new regulations will be included in MA plan documents starting January 1, 2024. O&P practitioners are strongly advised to review these new MA rules, commit them to memory, and use knowledge of them in negotiations with MA plans on behalf of patients who are denied approval for prior authorization of O&P care. This article summarizes key policies in the final rule including the following: Requiring MA plans to abide by fee-for-service Medicare coverage rules Limiting the use of internal MA or proprietary coverage guidelines Limiting prior authorization to certain situations Strengthening medical necessity determinations Establishing guardrails around utilization management (UM) tools and marketing Strengthening the qualifications of claims reviewers In addition to this important final rule, CMS is expected to issue another final rule on prior authorization in the coming months that applies to MA plans but also applies to many other types of plans, including Medicaid managed care, some private insurance plans, and the Childrens Health Insurance Program. That rule is expected to address the time limits of prior authorization decisions, streamlining the process, and establishing an electronic prior authorization process to expedite reviews of claims. Traditional Medicare Coverage Criteria One of the key aspects of the final MA rule is CMS’ clarification of what coverage rules apply to MA plans. Current Medicare statute and regulation already require all MA plans to provide coverage of items and services that are covered by Medicare Part A and Part B (collectively, traditional Medicare) and that are available to beneficiaries residing in an MA plan’s service area. Existing Medicare regulations similarly mandate that MA plans comply with all national coverage determinations (NCDs), applicable local coverage determinations (LCDs), and Medicare guidance documents unless those materials are superseded by regulations specific to MA. The final rule further clarifies requirements regarding coverage criteria for basic benefits by requiring MA plans to make medical necessity determinations based on traditional Medicare coverage and benefit criteria such as Medicare statutes, regulations, NCDs, and LCDs (unless superseded by laws applicable to MA plans). 1 Under the final rule, when an MA plan “is making a coverage determination on a Medicare-covered item or service with fully established coverage criteria, the MA organization cannot deny coverage of the item or service on the basis of internal, proprietary, or external clinical criteria that are not found in traditional Medicare coverage policies.” 2 In other words, “MA plans may not use InterQual or MCG [Milliman Coverage Guidelines] criteria, or similar products, to change coverage or payment criteria already established under traditional Medicare laws.” 3 The O&P community, through the Orthotic and Prosthetic Alliance, supported this policy in their comments on the proposed rule earlier this year, noting that it would greatly improve the health and well-being of MA patients in need of O&P care. The O&P Alliance recommended that CMS not permit MA organizations to have additional internal coverage criteria for coverage of O&P benefits that differ from coverage policies applicable to traditional Medicare. CMS withstood strong opposition from MA plans and the insurance industry as a whole and sided with providers on this key issue in the final rule. Internal Coverage Criteria Under the final rule, MA plans are permitted to utilize internal coverage criteria only when “coverage criteria are not fully established in applicable Medicare statutes, regulations, NCDs or LCDs.” 4 Coverage criteria are deemed “not fully established” when: There is an absence of any applicable Medicare statutes, regulations, NCDs, or LCDs setting forth coverage criteria; NCDs or LCDs include flexibility that explicitly allows for coverage in circumstances beyond the specific indications that are listed in an NCD or LCD; or Additional, unspecified criteria are needed to interpret or supplement general provisions in order to determine medical necessity consistently. The MA plan is required to show that the additional criteria provide clinical benefits that are highly likely to outweigh any clinical harms (e.g., delayed or decreased access to services). 5 In addition, the final rule mandates that MA plans follow procedures to develop internal MA coverage policies. 6 Specifically, the internal MA coverage criteria must be based on current evidence in widely used treatment guidelines or clinical literature.7 Current, widely used treatment guidelines are those developed by organizations representing clinical medical specialties and refers to guidelines for the treatment of specific diseases or conditions. 8 “Acceptable clinical literature includes large, randomized controlled trials or prospective cohort studies with clear results, published in a peer-reviewed journal, and specifically designed to answer the relevant clinical question, or large systematic reviews or meta-analyses summarizing the literature of the specific clinical question.” 9 Unpublished evidence, evidence that is a case series or report, or evidence that is derived solely from MA internal analyses would not meet this standard. Further, the MA plan must provide, in a publicly accessible manner, both the internal MA coverage criteria and a summary of evidence that was considered during the development of the internal criteria used to make medical necessity determinations. 10 A list of the sources of such evidence must also be publicly accessible. 11 Lastly, the MA plan must publish an explanation of the rationale that supports the adoption of the coverage criteria used to make a medical necessity determination. 12 When coverage criteria are not “fully established,” the MA plan is required to identify the general provisions that are being supplemented and “explain how 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.” 13 The final rule does not bar an MA plan from using InterQual or MCG to assist in creating internal coverage criteria. However, MA plans must comply with the aforementioned requirements when developing internal coverage criteria. CMS has made clear that “use of such tools and their proprietary nature does not absolve MA plans from their responsibilities under this final rule.” 14 The agency “expect[s] MA plans already using these tools, or those that may plan to use these tools in the future, to work with third parties that provide these tools to revise any utilization management products and ensure that these products meet the requirements” of the final rule. 15 Prior Authorization The final rule establishes safeguards regarding prior approval of healthcare services to avoid disruptions in care, to limit an MA coordinated care plan’s ability to partially approve what a provider ordered, and to minimize repetitive prior authorization. Under the final rule, approval of a prior authorization request for a course of treatment must be valid for as long as medically necessary to avoid disruptions in care, in accordance with applicable coverage criteria, the individual patient’s medical history, and the treating provider’s recommendation. 16 In addition, the final rule establishes that when a patient switches to a new MA coordinated care plan, or switches from traditional Medicare to an MA coordinated care plan, the MA coordinated care plan may not disrupt or require reauthorization for an active course of treatment for new plan enrollees for at least 90 days. 17 This requirement applies even if the service is furnished by an out-of-network provider. 18 A c ourse of treatment means a “prescribed order or ordered course of treatment for a specific individual with a specific condition is outlined and decided upon ahead of time with the patient and provider.” 19 CMS declined to require a minimum or maximum number of days for a course of treatment. The final rule also establishes that prior authorization processes for coordinated care plans may only be used in certain circumstances, including the following: 20 To confirm the presence of diagnoses or other medical criteria that are the basis for coverage determinations for the specific item or service; or For basic benefits, to ensure an item or service is medically necessary; or For supplemental benefits, to ensure that the provision of a service or benefit is clinically appropriate. If a coordinated care plan approved the provision of a covered item or service through a prior authorization or preservice determination, it is barred from denying coverage later on the basis of lack of medical necessity and from reopening such a decision for any reason except for good cause or if there is reliable evidence of fraud or similar fault. 21 These new requirements should help reduce the incidence of O&P care disruptions and delays and denials of care as a result of MA plans’ misuse or even abuse of prior authorization as a utilization management technique. Medical Necessity Determination Guidelines The final rule provides that MA plans must make medical necessity determinations based on all the following factors: 22 Whether the provision of items or services is reasonable and necessary The patient’s medical history (e.g., diagnoses, conditions, functional status), physician recommendations, and clinical notes The aforementioned coverage and benefit criteria. The MA plan may not deny coverage for basic benefits based on coverage criteria not specified above Where appropriate, involvement of the MA medical director In addition, CMS clarified that MA plans “must ensure that they are making medical necessity determinations based on the circumstances of the specific individual… as opposed to using an algorithm or software that doesn’t account for an individual’s circumstances.” 23 These policies establish some important guardrails around medical necessity determinations that are likely to ease O&P coverage decisions for patients with MA coverage. Utilization Management Tools Under existing regulations, MA plans must establish a formal mechanism to consult with the physicians who agreed to provide services under the MA plan, regarding the plan’s medical policy, quality improvement programs, and medical management procedures. 24 The existing Medicare regulations require MA plans to ensure that their practice guidelines and UM guidelines (1) are based on reasonable medical evidence or a consensus of healthcare professionals in the particular field; (2) consider the needs of the enrolled population; (3) are developed in consultation with contracting physicians; and (4) are reviewed and updated periodically. 25 CMS modified the regulations to align them with the agency’s requirements in the final rule for creating internal coverage criteria. To help ensure consistent access to medically necessary care and to help ensure that prior authorization and other UM policies and procedures comply with the final rule, CMS has finalized a requirement that MA plans must establish a UM committee that is led by a plan’s medical director if the plan utilizes UM policies and procedures. 26 An MA plan is prohibited from using any UM policies and procedures, including prior authorization policies, on or after January 1, 2024, unless the UM committee reviews and approves those policies and procedures. 27 At least annually, the UM committee is required to review the policies and procedures for all UM used by the MA plan. 28 The UM committee must record in writing the reason for its decisions regarding the development of UM policies and provide this documentation to CMS upon request. 29 However, CMS declined to require the UM committee to “have an ongoing or active oversight role in ensuring that decisions made by an MA plan throughout the year are consistent with the final, approved practice guidelines and UM policies at this time.” 30 Qualifications of MA Claims Reviewers Under the final rule, if the MA plan expects to issue an adverse medical necessity decision based on the initial review of the request (i.e., a denial of a prior authorization request or claim), the determination must be reviewed by “a physician or other appropriate healthcare professional with expertise in the field of medicine or healthcare that is appropriate for the services at issue, including knowledge of Medicare coverage criteria.” 31 CMS expects that the physician or other appropriate healthcare professional (e.g., registered nurse) “have specialized training, certification, or clinical experience in the applicable field of medicine.” 32 The physician or other healthcare professional is required to have a current and unrestricted license to practice within the scope of his or her profession. 33 If an MA plan reviewer engages in peer-to-peer consultations with the treating physician during adjudication of a determination, this final policy would apply. This policy permits MA plans to determine on a “case-by-case basis what constitutes appropriate expertise based on the services being requested and relevant aspects of the enrollee’s health condition.” 34 CMS expects “that the administrative case file would include documentation relevant to the medical necessity review conducted in each organization determination.” 35 However, the final rule does not require that the reviewing physician or healthcare professional be of the same specialty or subspecialty as the treating physician or other healthcare provider. For instance, a denial of O&P care does not have to be made solely by an MA orthotist or prosthetist, or an MA physical medicine and rehabilitation physician, for instance. CMS also did not adopt a policy requiring the reviewer to have a minimum number of years of specialized training in the field of medicine related to the service at issue. CMS stated that it wanted to provide flexibility for MA plans to manage clinical staffing resources. The O&P Alliance urged CMS to add more specific guardrails to ensure that appropriately qualified reviewers are involved in decision-making around coverage for particularly complex services, including O&P care. For instance, in the absence of clinical decision-makers at the MA plan who have training and experience with O&P, the O&P Alliance argued that MA plans should provide deference to the O&P care prescribed unless there is evidence in the patient record that specifically contradicts the physician’s medical necessity determination. CMS did not adopt this policy. Commentary The MA final rule is a major advance for O&P practices contending with routine delays and denials of prescribed O&P care for MA beneficiaries. Given the growth of the MA program, these standards are critical to maintaining access to care in the future. In publishing this final rule, CMS did not wither under the pressure of the MA plans and the insurance lobby that strongly objected to this proposed rule. Instead, CMS opted to create a new regulatory framework for MA benefit determinations that is expected to impact the O&P field—and all healthcare providers—in a very positive way for years to come. MA plans will, no doubt, continue to search for ways to skirt these new requirements and find ways to continue to impose filters and limitations on the provision of healthcare and O&P services, but this final rule is a major step forward and comes at a critical time when MA beneficiaries now outnumber those in the traditional, fee-for-service program. Peter W. Thomas, JD, is a managing partner of the Powers Law Firm, counsel to the O&P Alliance, and general counsel of the National Association for the Advancement of Orthotics and Prosthetics (NAAOP). Leela Baggett, JD, is senior associate at Powers Law Firm and counsel to both the O&P Alliance and NAAOP. References 42 C.F.R. § 422.101(b)(2). Final Rule, 88 Fed. Reg. at 22,188. Id. at 22,194-95. 42 C.F.R. § 422.101(b)(6) (emphasis added). § 422.101(b)(6)(i). § 422.101(b)(6). Id Id Id § 422.101(b)(6)(ii)(A). § 422.101(b)(6)(ii)(B). § 422.101(b)(6)(ii)(C). Id Final Rule, 88 Fed. Reg. at 22,195. Id 42 C.F.R. § 422.112(b)(8)(i)(A). § 422.112(b)(8)(i)(B). Id § 422.112(b)(8)(ii)(A). § 422.138(b). § 422.138(c). § 422.101(c)(1)(i). Fed. Reg. at 22,195. 42 C.F.R. § 422.202(b). § 422.202(b)(1). § 422.137(a). § 422.137(b). § 422.137(d)(1). § 422.137(d)(5). Fed. Reg. at 22,214. 42 C.F.R. § 422.566(d). Fed. Reg. at 22,218. 42 C.F.R. § 422.566(d). Fed. Reg. at 22,219 Id. at 22,224. Image: Timon/stock.adobe.com

CMS Issues New Rules for Prior Authorization Under the Medicare Advantage Program

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CMS Issues New Rules for Prior Authorization Under the Medicare Advantage Program

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