On December 14, 2022, the Biden administration released a proposal to streamline Medicare Advantage (MA) and Part D plan prior authorization and add health equity requirements to star ratings. The Centers for Medicare & Medicaid Services (CMS) released a proposed rule outlining policies for MA and Part D plans for the 2024 coverage year and implementing drug price provisions in the Inflation Reduction Act. It is the latest move by the Biden administration to address prior authorization, a key source of administrative burden for doctors, and to address misleading marketing. “From streamlining prior authorization to cracking down on misleading marketing, we are committed to ensuring that everyone can have peace of mind and get the healthcare they need,” said Department of Health and Human Services Secretary Xavier Becerra.
More on Proposed Rule
In the rule, CMS proposes several provisions governing prior authorization, utilization management and medical necessity determinations. These proposals come in the wake of an April 2022 report by the Office of Inspector General raising concerns about MA plan denials of requests for prior authorization. Congress has also focused on MAOs’ use of prior authorization, with the US House of Representatives recently passing bipartisan legislation (not adopted by the Senate) that would reform the MA prior authorization process.
CMS’s proposals include revising standards for coverage criteria. Generally, MAOs must follow published standards and may not apply unpublished internal criteria. Where no applicable Medicare statute, regulation, national coverage determination or local coverage determination establishes that an item or service must be covered, MAOs may develop internal clinical coverage criteria based on current evidence in widely used treatment guidelines or clinical literature made publicly available. The proposal sets out other requirements for such coverage criteria.
The proposed rule also limits MAOs’ discretion to require use of alternate services or settings. When care can be delivered in more than one way or setting, and a contracted provider has ordered or requested Medicare covered items or services for an MA enrollee, the MAO may only deny coverage of the services or setting because the ordered services fail to meet the regulatory criteria.
CMS is also seeking to regulate the use of prior authorization. CMS proposes that prior authorization may only be used to confirm the presence of diagnoses or other medical criteria that are the basis for coverage determinations for the specific item or service, to ensure basic benefits are medically necessary based on newly specified standards or to ensure that the furnishing of supplemental benefits is clinically appropriate. The proposed rule also would establish that if a plan approves the furnishing of a service through an advance determination of coverage, it may not deny coverage later on the basis of a lack of medical necessity.
Furthermore, CMS aims to establish a utilization management committee. CMS proposes that MAOs establish a utilization management committee, similar to a pharmacy and therapeutics committee, that would review policies annually and ensure consistency with traditional Medicare’s coverage decisions and guidelines. Further, the proposed rule requires relevant expertise for coverage determinations. CMS would require that the healthcare professional conducting a medical necessity review have expertise in the field of medicine that is appropriate for the item or service being requested before an MAO or applicable integrated plan issues an adverse determination.