In April, CMS published its long-awaited final rule on prior authorization practices by Medicare Advantage Plans (MAPs). We think it addresses many common complaints from DME suppliers and patients alike.

Next Episode: Thursday, August 22, 2024

In general, the rule reaffirms that MAPs must adhere to guidelines established for beneficiaries covered under the traditional Medicare Fee-For-Service (FFS) program. MAP coverage cannot be more restrictive than what is offered under Medicare Parts A and B, and MAP carriers must mirror existing FFS coverage access.

MAPs may enforce new rules only when:

  1. There is no FFS precedent.
  2. They publicly post their treatment guidelines, decision criteria, and required supporting clinical evidence used to make coverage determinations.

In addition to general reaffirmations of existing rules, mostly in response to recent reports of bad acting, the Final Rule introduces new requirements to ensure continuity of care.

Prior Authorization Limits

Prior Authorization should be a tool used to confirm a beneficiary’s diagnosis meets medical necessity requirements included in the payer’s policy. Under the Final Rule, MAPs should approve the authorization once those conditions of payment are satisfied.

Where many MAPs have layered additional obstacles into the process to minimize their own costs, the Final Rule makes it clear the singular purpose of prior authorization is to determine the diagnosis satisfies medical necessity requirements. It is not to impose new rules or toensure the payer’s  profitability.

Ban on Repeat Authorizations

The Final Rule bans a popular practice where MAPs require periodic prior authorizations for continued care. MAPs should not require renewal authorizations for chronic conditions. Once the payer determines the   patient has a covered condition and approves the initial authorization, they cannot require additional authorizations until the treatment course ends.

That said, CMS will allow MAPs to implement renewal authorizations where it is consistent with FFS requirements. For example, Medicare requires FFS patients with insulin pumps to visit their physician every three months as a condition of continued coverage. Medicare Advantage Plans could subject their enrollees using insulin pumps to a similar requirement through renewal authorizations.

90-Day Minimum Transition for New Enrollees With Active Service

DME suppliers often do not know when an active patient changes their insurance coverage until they receive a denial from the previous plan. Adding insult to injury, MAPs do not always honor retroactive authorizations, so suppliers simply lose revenue related to the period in between the insurance change and authorization by the new payer.

In one of its most significant mandates, the Final Rule requires that all MAPs establish a transition period of at least 90 days for new enrollees with active, preexisting service. During the transition window, MAPs cannot subject any active treatment to an authorization requirement. Upon the conclusion of the transition window or the conclusion of the treatment, whichever comes first, the MAP can require an authorization for care and direct that care through its own network of suppliers.

The transition requirement applies to all preexisting services, even if the care started with a supplier not in the new payer’s preferred network.

Annual Review of Authorization Practices

The Final Rule requires MAPs to create utilization management committees tasked with annual reviews of prior authorization practices. The review process must ensure prior authorization and management policies stay consistent with existing Medicare FFS coverage, including applicable national and local coverage determinations and other guidance.

This rule is a significant improvement and will help DME suppliers service active patients with chronic conditions effectively should they switch to a Medicare Advantage Plan during treatment. While MAPs still have their challenges, we think this is a meaningful step forward.