The Centers for Medicare and Medicaid Services (CMS) recently published a final rule (Final Rule) that requires Medicare Advantage (MA) plans to:
- Follow fee-for-service Medicare coverage rules.
- Limit the use of internal MA or proprietary guidelines.
- Limit prior authorization in accordance with the Final Rule.
The Final Rule is effective on June 5, 2023. This article summarizes key policies that will reduce abusive utilization management techniques, ensure transparency in coverage, and reduce improper denials of claims for services provided to Medicare Advantage enrollees.
Traditional Medicare Coverage Criteria
CMS classified requirements that will help ensure that MA plans do not limit or deny coverage when the service would be covered under Medicare Part A or Part B (known as Traditional Medicare). “MA plans may not use InterQual or MCG criteria, or similar products, to change coverage or payment criteria already established under Traditional Medicare laws.”
The Final Rule clarifies requirements regarding coverage criteria for basic benefits, including allergy services. It requires MA plans to make medical necessity determinations based on Traditional Medicare coverage and benefit criteria such as Medicare statutes, regulations, national coverage determinations (NCDs), and local coverage determinations (LCDs).
Internal or Proprietary Criteria
MA plans are permitted to use internal coverage criteria only when “coverage criteria are not fully established,” i.e., when:
- There is an absence of any applicable Medicare statutes, regulations, NCDs or LCDs describing coverage criteria.
- NCDs or LCDs include flexibility that explicitly allows for coverage in circumstances beyond those listed in an NCD or LCD; or
- Additional, unspecified criteria are needed to interpret or supplement general provisions to consistently determine medical necessity. The MA plan is required to show that the additional criteria provide clinical benefits that are highly likely to outweigh any clinical harm (e.g., delayed or decreased access to services).
The Final Rule also requires MA plans to follow certain procedures to develop internal coverage policies. The internal coverage criteria must be based on current evidence widely used in treatment guidelines or clinical literature. Unpublished evidence, evidence that is a case series or report, or evidence that is derived solely from MA internal analyses cannot be used to develop internal coverage policies.
Furthermore, the MA plan must provide, in a publicly accessible manner:
- The internal coverage criteria.
- A summary of evidence that was considered during the development of the internal criteria.
- A list of the sources of such evidence.
- An explanation of the rationale that supports the adoption of the coverage criteria.
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.”
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 providers’ recommendation. This point, along with many others the College’s Advocacy Council advocated for in our comment letter and during our recent Strike Force visits in Washington, were included in the new rule.
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.
The Final Rule also establishes that prior authorization processes for coordinated care plans may only be used for one or more of the following:
- To confirm the presence of diagnoses (or other medical criteria) that are the basis for coverage determinations.
- For basic benefits, to ensure an item or service is medically necessary.
- 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 service through a prior authorization or pre-service determination, it is barred from denying coverage later based on the 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.
Medical Necessity Determinations
MA plans must make medical necessity determinations based on all of the following:
- 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 coverage and benefit criteria noted above.
- The involvement of the MA Medical Director, when appropriate.
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.”
MA Utilization Management (UM) Committee
CMS now requires that MA plans establish a UM committee, led by a plan’s medical director, to review and approve policies and procedures – including prior authorization policies – used on or after Jan. 1, 2024. The committee must review the policies and procedures at least annually and record the reasons for its decisions regarding the development of UM policies.
Qualifications of Reviewers
Under the Final Rule, if a MA plan expects to issue an adverse medical necessity decision based on the initial review of a request, the determination must be reviewed by “a physician or other appropriate health care professional with expertise in the field of medicine or health care that is appropriate for the services at issue, including knowledge of Medicare coverage criteria.” CMS expects that the physician or other appropriate health care professional (e.g., registered nurse) “have specialized training, certification, or clinical experience in the applicable field of medicine.”
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.” CMS expects “that the administrative case file would include documentation relevant to the medical necessity review conducted in each organization determination.”
The Advocacy Council – ADVOCATING FOR ALLERGISTS AND THEIR PATIENTS.
