Medical Necessity

CMS and other stakeholders take steps to improve prior authorization in Medicare Advantage and beyond

2024 regulations for MA plans are designed to ensure utilization management policies mirror coverage determinations in Medicare fee-for-service.

April 6, 2023 4:47 pm

Several recent developments point to an industrywide effort to ease the burden of prior authorization.

Most notably, CMS on April 5 finalized a rule that includes provisions designed to improve prior authorization in Medicare Advantage (MA) starting with the 2024 plan year.

The rule addresses a few aspects of prior authorization, among them the way such policies apply to coordinated care plans (e.g., HMOs, PPOs). The new regulations codify preexisting guidance that prior authorization policies for such 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 this rule.”

In addition, authorizations in MA “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.” If an MA beneficiary switches to a new plan, the authorization must remain in place during a 90-day transition period.

Another point of emphasis will require plans to comply with national and local coverage determinations, as well as general coverage and benefit conditions, that are applicable in Medicare fee-for-service (FFS). MA plans can apply internal coverage criteria in scenarios where no Medicare FFS guidelines are available, but they must publicly post a summary of the evidence that went into the decision.

MA plans also must establish a utilization management committee to review internal policies annually, ensuring the policies are consistent with established coverage requirements.

A welcome turn for providers

Provider advocates supported the measures as described in a proposed rule issued late last year and were pleased to see them become finalized.

“This rule will go a long way in protecting patients and ensuring timely access to care, as well as reducing inappropriate administrative burden on an already strained healthcare workforce,” Ashley Thompson, senior vice president for public policy analysis and development with the American Hospital Association (AHA), said in a written statement.

The Better Medicare Alliance, a pro-MA advocacy group that typically supports the health plan perspective on policy matters, also issued a statement saying it backs the measures.

The AHA’s statement on the rule also highlighted provisions to close gaps in access to behavioral health and post-acute care services in MA. Those are areas where hospitals “commonly report some of the most significant insurance-related barriers to patient care,” Thompson said.

Among the 2024 provisions affecting behavioral health services are:

  • The inclusion of clinical psychologists and licensed social workers in assessments of network adequacy
  • A clarification that some behavioral health services may qualify as emergency services and therefore can’t be subject to prior authorization  

With respect to post-acute care, the rule stipulates that MA plans may deny a request for Medicare-covered post-acute care services only upon determination that Medicare coverage criteria cannot be met in the requested setting.

The bigger picture on prior authorization

The new final rule is part of a broader effort by CMS and other stakeholders to address prior authorization. It’s an urgent topic, as indicated in a December 2022 survey conducted by the American Medical Association, with 94% of physicians reporting that prior authorization causes care delays at least some of the time.

A proposed rule issued in December would establish time frames for payer responses to prior authorization requests in MA, Medicaid managed care and the Affordable Care Act insurance marketplaces starting in 2026. Deadlines would be 72 hours for expedited requests and seven days for standard requests. CMS said it would consider shortening those durations based on stakeholder feedback to the proposals (the comment period closed in March).

The rule also would require payers to implement improvements to the electronic exchange of data, including to support prior authorization. The hope is that standardizing the technical aspects of prior authorization across government programs will help providers navigate the process more easily.

“Prior authorization is an important utilization tool, but when it’s onerous to get through the process, that’s a problem for everybody involved,” Mary Greene, MD, director of CMS’s Office of Burden Reduction and Health Informatics, said during a stakeholder call in January.

The rule also would enhance transparency by obligating payers to publish metrics on approvals and appeals.

“It gives patients more visibility into how plans handle prior authorizations, and that information might be helpful to patients when they select the health plan they want to join,” Greene said.

She added that a separate proposed rule on healthcare attachments also would support prior authorization, specifically in situations that call for the transmission of clinical documentation such as medical charts, X-rays and referrals.

Insurers making changes

With the new regulations looming, the nation’s largest health insurer is modifying its prior authorization policies.

UnitedHealthcare announced March 29 it would remove prior authorization from nearly 20% of nonurgent items and services starting in Q3. The changes will affect the company’s commercial, MA and Medicaid managed care members.

In addition, a Gold Card Program will allow participating providers to avoid prior authorization for most procedures starting in 2024.

“We need to continue to make sure the system works better for everyone, and we will continue to evaluate prior authorization codes and look for opportunities to limit or remove them while improving our systems and infrastructure,” Anne Docimo, MD, chief medical officer with UnitedHealthcare, said in a written statement. “We hope other health plans will make similar changes.”

According to a Wall Street Journal report (login required), Cigna has removed prior authorization for 500 items and services since 2020. Aetna likewise is looking to make process improvements to get ahead of the new regulations.

On the flip side, UnitedHealthcare has added prior authorization requirements for gastroenterology endoscopy services for commercial plan members, effective June 1.

“In recent years, studies have shown evidence that overutilization of invasive non-screening (surveillance and diagnostic) colonoscopy, EGD and capsule endoscopy procedures in certain situations exposes patients to unnecessary risk and costs,” the insurer said in announcing the change.


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