CMS NEW prior authorization rule takes effect January 1st 2024

CMS (Centers for Medicare and Medicaid Services), issued a final rule that revises the Medicare Advantage (MA or Part C), Medicare Prescription Drug Benefit (Part D), Medicare Cost Plan, and Programs of All-Inclusive Care for the Elderly (PACE) regulations to implement changes related to Star Ratings, marketing and communications, health equity, provider directories, coverage criteria, prior authorization, network adequacy, and other programmatic areas. This final rule also codifies regulations implementing section 118 of Division CC of the Consolidated Appropriations Act, 2021, and Section 11404 of the Inflation Reduction Act, and includes provisions to codify existing sub-regulatory guidance in the Part C, Part D, and PACE programs.

In this final rule, CMS is not addressing comments received on the provisions of the proposed rule that we are not finalizing at this time. Rather, the agency will address them at a later time, such as in possible future rulemaking, as appropriate.

This fact sheet discusses the major provisions of the final rule. The final rule can be downloaded here: https://www.federalregister.gov/public-inspection/current.

Ensuring Timely Access to Care: Utilization Management Requirements

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.

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 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.

Per 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.

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 to establish a Utilization Management Committee to review policies annually and ensure consistency with Traditional Medicares 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 be valid for as long as medically reasonable and necessary to avoid disruptions in care in accordance with applicable coverage criteria, the patients medical history, and the treating providers 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.