CMS cracks down on prior authorization requirements in MEDICARE ADVANTAGE plans

Tension has developed between CMS and their Medicare Advantage Plans.

Whose prior authorization is it anyway? MA plans are contracted to provide insurance benefits via a private contract. Strictly speaking, MA plans are not the same as fee-for-service Medicare. The goal was to reduce Medicare costs by contracting with groups and/or private insurers (ie, Humana. Aetna and smaller insurance entities (local). These MA plans are paid a contract amount for covering the same benefits as FFS Medicare.  In some cases, this is an FFS arrangement with the MA plan.

In order to contain costs prior authorizations are used to filter out unnecessary tests, or procedures.

In real life, this serves to deny coverage, and at the least increases costs for the providers. (more personnel to process prior authorizations.  In some cases, additional insurance billers are required for at least 1 FTE, or more in some cases for group practices. The cost has been absorbed by the provider.

Medicare Advantage (MA) plans will find it harder to require prior authorizations for their coverage under a new final rule from the Centers for Medicare and Medicaid Services (CMS).

CMS says the new rule, announced on April 5, is intended to address MA member complaints that the plan’s prior authorization requirements restrict their access to care. In response, the rule will:

limit the use of coordinated care MA plans’ prior authorization policies to confirm the presence of diagnoses or other medical criteria and/or ensure that an item or service is medically necessary,

prohibit coordinated care MA plans from requiring prior authorizations for an active course of treatment for at least 90 days when a patient switches MA plans, require all MA plans to establish utilization management committees to ensure consistency with Traditional Medicare’s national and local coverage decisions and guidelines, and require that prior authorization approvals remain valid “for as long as medically reasonable and necessary to avoid disruptions in care in accordance with applicable coverage criteria, the patient’s medical history, and the treating provider’s recommendation.”

“Together, these changes will help ensure enrollees have consistent access to medically- necessary care while also maintaining medical management tools that emphasize the important role MA plans play in coordinating medically-necessary care,” CMS said.

The rule comes in the wake of a 2022 report from the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services that found that some MA plans have been denying prior authorization requests even though the requests met Medicare coverage rules.

The OIG report also found that plans were denying payments to providers for some services that met both Medicare coverage and the MA plan’s own billing rules.

Physicians’ groups hailed the rule. “Family physicians know first hand how this will help ensure timely access to care while alleviating physicians’ administrative burdens and patients’ care delays,” American Academy of Family Physicians President Tochi Iroku-Malize, MD, FAAFP, said in a tweet.

 

CMS rule cracks down on prior authorization requirements in MA plans