CMS Makes Changes to Prior Authorization Rules Under Medicare Advantage
On April 5, officials at the Centers for Medicare and Medicaid Services (CMS) released their “2024 Medicare Advantage and Part D Final Rule,” CMS-4201-F, making revisions to regulations around the Medicare Advantage program, through which CMS contracts with health plans, which in turn contract with providers, to deliver services to Medicare beneficiaries enrolled in Medicare Advantage plans.
One major area of interest to providers has been around anticipated changes to prior authorization rules under the MA regs. The announcement, which was posted to CMS’s website on April 5, included several paragraphs of particular interest to providers, including “Removing Barriers to Care Created by Complex Prior Authorization and Utilization Management,” “Expanding Access to Behavioral Health Care,” and “Promoting More Equitable Care.”
Under the heading “Removing Barriers to Care Created by Complex Prior Authorization and Utilization Management,” officials stated this: “CMS is also providing important protections regarding utilization management policies and coverage criteria that ensure that Medicare Advantage enrollees receive the same access to medically necessary care that they would receive in Traditional Medicare. The rule streamlines prior authorization requirements and reduces disruption for enrollees by requiring that a granted prior authorization approval remains valid for as long as medically necessary to avoid disruptions in care, requiring Medicare Advantage plans to annually review utilization management policies, and requiring denials of coverage based on medical necessity be reviewed by health care professionals with relevant expertise before a denial can be issued. These policies complement proposals in CMS’ Advancing Interoperability and Improving Prior Authorization Processes Proposed Rule (CMS-0057-P).”
Under the heading “Expanding Access to Behavioral Health Care,” officials wrote this: “CMS remains committed to emphasizing the critical role that access to behavioral health plays in whole person care. In line with CMS’ Behavioral Health Strategy and the Administration’s strategy to address the national mental health crisis, CMS is strengthening behavioral health network adequacy in Medicare Advantage by adding clinical psychologists and licensed clinical social workers to the list of evaluated specialties. CMS is also finalizing wait time standards for behavioral health and primary care services and more specific notice requirements from plans to patients when these providers are dropped from their networks. In addition, CMS is requiring most types of Medicare Advantage plans to include behavioral health services in care coordination programs, ensuring that behavioral health care is a core part of person-centered care planning.”
And under the heading “Promoting More Equitable Care,” officials stated that, “Additionally, CMS is advancing health equity and driving quality in health coverage by establishing a health equity index in the Star Ratings program that will reward Medicare Advantage and Medicare Part D plans that provide excellent care for underserved populations. Plans will also be required to provide culturally competent care to an expanded list of populations and to improve equitable access to care for those with limited English proficiency, through newly expanded requirements for providing materials in alternate formats and languages. The final rule balances patient experience/complaints measures, access measures, and health outcomes measures in the Star Ratings program to more effectively focus both on patient-centric care and on improving clinical outcomes.”
In addition, in the fact sheet announcing the Final Rule’s changes, CMS officials noted that “CMS has received numerous inquiries regarding the use of prior authorization by Medicare Advantage plans and the effect on beneficiary access to care. In the rule, CMS finalizes impactful changes to address these concerns and to advance timely access to medically necessary care for enrollees.”
As a result, officials stated, “The final rule clarifies clinical criteria guidelines to ensure people with MA receive access to the same medically necessary care they would receive in Traditional Medicare. This aligns with recent Office of Inspector General (OIG) recommendations. Specifically, CMS clarifies rules related to acceptable coverage criteria for basic benefits by requiring that MA plans must comply with national coverage determinations (NCD), local coverage determinations (LCD), and general coverage and benefit conditions included in Traditional Medicare regulations. CMS is also finalizing that when coverage criteria are not fully established, MA organizations may create internal coverage criteria based on current evidence in widely used treatment guidelines or clinical literature made publicly available to CMS, enrollees, and providers. In the final rule, CMS more clearly defines when applicable Medicare coverage criteria are not fully established by explicitly stating the circumstances under which MA plans may apply internal coverage criteria when making medical necessity decisions. CMS believes that permitting the use of publicly accessible internal coverage criteria in limited circumstances is necessary to promote transparent, and evidence-based clinical decisions by MA plans that are consistent with Traditional Medicare.”
Further, officials noted that “The final rule also streamlines prior authorization requirements, including adding continuity of care requirements and reducing disruptions for beneficiaries. CMS’ final rule requires that coordinated care plan prior authorization policies 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. Second, this final rule requires coordinated care plans to provide a minimum 90-day transition period when an enrollee currently undergoing treatment switches to a new MA plan, during which the new MA plan may not require prior authorization for the active course of treatment. Third, to ensure prior authorization is being used appropriately, CMS is requiring all MA plans establish a Utilization Management Committee to review policies annually and ensure consistency with Traditional Medicare’s national and local coverage decisions and guidelines. Finally, to address concerns that the proposed rule did not sufficiently define the expected duration of “course of treatment,” the final rule requires that approval of a prior authorization request for a course of treatment must be 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.”
Provider associations respond
On April 4, on the eve of the Final Rule’s publication, the leaders at the Alexandria, Va.-based American Medical Group Association, AMGA, released the following statement: “AMGA appreciates the Centers for Medicare & Medicaid Services’ (CMS’) decision to implement significant changes to the Medicare Advantage (MA) risk adjustment model over a three-year period. AMGA was concerned that the initial proposal to immediately modifying the model would be needlessly disruptive to AMGA-member providers and patients enrolled in MA plans. Phasing in the changes to the hierarchical condition categories model (CMS-HCC model) will allow CMS to address any unintended consequences of the changes.”
The statement quoted AMGA president and CEO Jerry Penso, M.D., as saying that “AMGA remains concerned that CMS views this reform as a way to address so-called ‘discretionary coding’ in the risk adjustment model. But, with this more cautious approach, CMS will have an opportunity to refine the plan based on the effects the changes have on providers and their patients.”
The association went on to emphasize that “AMGA strongly recommends CMS closely monitor not only the effect of the HCC model changes on MA plans, but also how the changes affect providers and patients. AMGA also continues to support CMS’ efforts to align quality measurements across Medicare. CMS’ “Universal Foundation” quality measure concept is similar to elements of AMGA’s 2018 initiative, which developed a streamlined set of quality measures designed to simplify the reporting process and limit the burden on providers and group practices, while still reporting clinically relevant and actionable data. As CMS continues its work in this area, AMGA and its providers are prepared to offer their experience and expertise to ensure quality measures support the continued transition to value-based care and do not needlessly contribute to administrative burdens.”
And, days before that, on March 31, the leaders of America’s Physician Groups (APG, Los Angeles and Washington, D.C.) spoke out, with the following statement: “America’s Physician Groups (APG) today expressed satisfaction that the Centers for Medicare & Medicaid Services (CMS) has elected to phase in the implementation of proposed changes to the Medicare Advantage (MA) risk adjustment model – a decision that will allow CMS to gather more input from stakeholders about the expected impact on disadvantaged MA enrollees. APG looks forward to further analyzing and understanding the real-world impact of the scheduled phase-in of the new risk-scoring approach, and the fact that the new model will take full effect in 2026.”
“We are gratified that CMS and the Biden Administration listened to the collective voice of health care provider groups that asked for either a one-year delay or phased-in adoption of the drastically different risk adjustment model for MA,” Susan Dentzer, APG’s president and CEO, said in the statement. “Multiple studies pointed to the damaging impact of the proposed changes on low-income, less educated, chronically ill MA enrollees likely to be dually eligible for Medicare and Medicaid, and also to be Black or LatinX. Proceeding rapidly with these changes without further analysis and stakeholder input would have flown in the face of the administration’s commitment to greater health equity. We are glad that CMS and the administration mostly listened.”
Further, the APG statement said, “Dentzer added that the decision to phase in the risk adjustment model changes should also allow opportunities for CMS to share more detailed information about the methodology underlying its proposed diagnostic coding changes; potentially make revisions to lessen the adverse impact on the worst-affected populations; and allow MA plans and the physicians who care for patients to seek ways to mitigate the harmful effects.”
What’s more, APG’s leaders noted, “CMS’s proposed risk adjustment overhaul included removing more than 2,000 diagnostic codes that the agency said were reported more frequently in MA than for in traditional fee-for-service Medicare. CMS assumed that most of the resulting coding activity was inappropriate, even though there are few incentives for diagnostic coding to occur in the traditional Medicare program, and thus this portion of Medicare is considered ‘under-coded.’ By contrast, APG and others have argued, the coding in MA can reflect real illnesses that affect Medicare beneficiaries. Many of the diagnostic codes CMS proposed to eliminate or downgrade were for common chronic conditions, such as major depressive disorder, diabetes, vascular disease, rheumatoid arthritis, and inflammatory connective tissue disorders such as lupus. APG argued that altering these codes would reduce the resources that risk-adjusted payments provide to care for many beneficiaries, particularly the disadvantaged populations among whom these conditions are highly prevalent.”
