In its April 2023 final CY2024 Medicare Advantage (MA) policy and technical rule, LeadingAge was pleased to see Centers for Medicare & Medicaid Services (CMS) clarified how MA plans make coverage determinations, added some guardrails on prior authorizations and prohibited certain marketing and communication practices used by some plans and their agents. However, it remains to be seen if these new regulatory changes will truly affect change, if current enforcement and oversight is sufficient to achieve the goals of the changes, or if plans will continue to flout requirements or find new loopholes to avoid compliance.

When do the new rules apply?
While it has been widely reported that the final rule takes effect on June 5, 2023, it is important to note that some of the rule’s provisions are applicable on alternate dates. Specifically, CMS clarified for LeadingAge that new rules on coverage determinations, changes to prior authorization practices both are applicable for plans and coverage determinations made beginning January 1, 2024. However, CMS also noted that it has always been the policy that MA plans must follow Medicare coverage criteria for their determinations on Medicare Part A & B services and plans should be abiding by this requirement even before the new rules apply. The new Utilization Management Committee and alignment of plan UM practices with Medicare regulations requires this work to be completed prior to the start of the 2024 plan year to be effective on January 1. Plans will be prevented from using UM policies that have not been reviewed until a review and approval is completed. Changes to how plans market and communicate with beneficiaries will begin September 30, 2023 in advance of the annual open enrollment period, which begins October 15.

The final rule covers a number of issue areas including coverage determinations and plan prior authorization processes. Here are the highlights, a detailed discussion of each follows. The final rule:

• Codifies requirement that MA plans must cover basic Medicare benefits like traditional Medicare and lists additional Medicare coverage resources to guide those decisions.
• Limits purposes for which prior authorizations can be used.
• Requires physician-ordered site of service to be honored by plan beginning January 1, 2024.
• Prohibits plans from retroactively denying an approved, medically necessary service.
• Ensures 90-day transitions for beneficiaries in middle of treatment without prior authorization.
• Requires coverage denials to be reviewed by providers with expertise in the sought services.
• Requires plans to establish a Utilization Management Committee charged with an annual review of plan UM policies.
• Establishes additional marketing prohibitions to protect beneficiaries from deceptive practices.

MA Coverage Determinations Must Be No More Restrictive Than Medicare FFS

While CMS has indicated that MA plans have always been required to cover traditional Medicare A & B benefits, providers know that has not always been the practice. Under the final rule, CMS codified and confirmed that MA plans must follow Medicare coverage criteria and cannot impose their own internal, more restrictive criteria on top of this (though there are some limited exceptions). In addition, CMS expanded the list of resources that plans must consult in determining and aligning with what traditional Medicare would cover. These resources include national coverage determinations (NCDs) local coverage determinations (LCDs), the Medicare Manual, both coverage and payment criteria under Medicare regulations. CMS specifically mentions SNF and HH coverage requirements in the list of what MA plans must comply with. Further, CMS reinforced that while plans can’t cover less than traditional Medicare if it is medically necessary, they can cover more. One example of this is plans can continue to waive the 3-day inpatient stay requirement to be eligible for SNF care.

CMS acknowledges that there are circumstances where coverage criteria is “not fully established” or absent for a particular Medicare service or item. CMS considers criteria “not fully established” when additional, unspecified criteria are needed to interpret or supplement general provisions in order to determine medical necessity consistently.” In these cases, CMS will permit plans to establish and use “publicly accessible internal coverage criteria.” However, the internal criteria must use, “current evidence in widely used treatment guidelines or clinical literature” and the evidence used must be made publicly available.

On a related note, CMS did not explicitly ban MA plans from using third-party entities and their tools (e.g. NaviHealth) for coverage determinations but effectively barred their use by requiring these algorithmic tools to comply with Medicare coverage standards and demonstrate that their tools are based on publicly-accessible, widely-used treatment guidelines or clinical literature. Given that these tools are often based upon proprietary data and analyses, at present, it looks like plans would be prohibited from using these tools unless their data source is divulged.

LeadingAge is grateful for CMS’s attention to concerns we raised about inappropriate care denials but are disappointed that the final rule did not contain any additional mechanisms to ensure plan compliance with these requirements, as we requested. Minimally, we suggested CMS establish a provider complaint line to report plan noncompliance; and track and publish plan data related to complaints on a per plan basis. CMS declined to adopt such provisions indicating their current audit and complaint systems are sufficient. However, CMS said it will monitor whether these rule changes have the intended impact and it is open to further regulatory updates if warranted.

In another section, CMS changed its previous policies and now prohibits plans from overriding a physician’s order for a particular site of service. For example, if a hospital discharging physician orders SNF services, then the plan cannot redirect the person to home health unless they can prove, “that the traditional Medicare coverage criteria for the services cannot be satisfied in that particular setting.”

LeadingAge encourages members to share egregious examples of plan non-compliance with the new guidelines. Members can begin reporting now when plans fail to follow Medicare coverage criteria for Medicare A & B services the same as traditional Medicare.

Limits on Use of Prior Authorization

CMS limits MA plans by permitting them to only use prior authorization (PA) to confirm diagnoses and medical necessity and when determining clinical appropriateness of supplemental benefits.

Duration Covered by Prior Authorization

In addition, CMS sought to reduce the need for providers to submit frequent, repeat authorizations for the same course of treatment. Beginning January 1, 2024, when an MA plan approves a PA, it must be valid for a “course of treatment” as long as that treatment remains medically necessary. CMS clarified this also applies to SNF and HH services. The final rule defines “course of treatment” as, “a prescribed order or ordered course of treatment for a specific individual with a specific condition is outlined and decided upon ahead of time with the patient and provider. A course of treatment may but is not required to be part of a treatment plan.” Further, an active course of treatment includes situations where a patient is transferred from an acute inpatient setting to a SNF, home health (HH) or other post-acute care setting.

CMS allows MA plans to approve treatment for a different period of time than that which was prescribed by the provider, but only in limited situations. Shorter durations can only be approved if supported by Medicare coverage criteria, the patient’s medical record and by widely-available treatment guidelines or clinical literature. These shorter durations must also be reviewed by a physician or medical professional with sufficient medical or other expertise, prior to the decision being issued by the plan.

In addition, CMS prohibits plans from approving a blanket duration of time for all service authorizations or taking a a one-size-fits-all approach. “A MA plan may not establish blanket rules for the duration of an authorization associated with course of treatment decisions for purposes of convenience or simplicity; the duration of a prior authorization must be valid for as long as medically necessary to avoid disruptions in care…”and “MAOs 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.”

We would interpret the new rules to begin addressing some of the early terminations of coverage issues that members have raised. For example, it appears that if a plan authorizes SNF care for an individual who needs IV drugs, this authorization would be valid for all the days of IV medication ordered by the physician because it is a covered Medicare service, the patient’s medical record supports the need for the medications and the IV drugs were ordered for the identified duration by the person’s physician. These changes may lead to changes in how plans approve coverage for IV drug regimens administered while in SNF care.

Care Continuity

Medicare beneficiaries who are newly enrolled in an MA plan or who change MA plans will have care continuity, under the new rules, when in the middle of an active course of treatment. Specifically, MA plans must provide at least a 90-day transition period for any MA enrollee who is in an active course of treatment at the time of enrollment even if the service is being provided by an out-of-network provider. Under this provision, plans cannot require a prior authorization for the active course of treatment or deny coverage for not obtaining prior authorization for a 90-day period. It only covers basic Medicare benefits not supplemental benefits. Plans are permitted to offer this continuity of care coverage beyond the required 90 days if the treatment period is longer. While a plan cannot deny payment for these services based upon not receiving a prior authorization, it can review these services against permissible coverage criteria when determining payment. There should only be a problem in cases where the services provided do not align with traditional Medicare coverage criteria. (Applicable beginning with coverage January 1, 2024)

Prohibit Retroactive Plan Denials for Approved Medically Necessary Services

One regulatory change (section 422.138(c)) may reduce the number of claims/coverage determinations audited as the new rule says that if a plan approves a service via prior authorization based upon medical necessity, it cannot later deny coverage or payment based upon medical necessity.  LeadingAge asked CMS in its rule comments to provide more clarification. In response, CMS clarified that these decisions can only be re-opened if there is “good cause” or “reliable evidence of fraud.” The regulation defines “good cause” to essentially mean that new evidence has come to light that was not available at the time of the original decision and might result in a different conclusion, or the information used for the original decisions resulted in an obvious error. To be “reliable evidence of fraud,” the evidence must be relevant, credible and material that fraud occurred.

Under current regulations (422.616(a)), an organization can re-open a determination to be within 1 year from the date of the initial determination for any reason; and has up to 4 years if there is “good cause,” and at any time when there is “reliable evidence that the initial determination was procured by fraud or similar fault.”

Service Denials Must Be Reviewed by Provider with Relevant Expertise.

If a plan issues a partial or full denial of a service, CMS requires that it must be reviewed by a health care professional with expertise in the field of medicine that is appropriate for the service being requested.

Utilization Management Committee and Review

LeadingAge commented to CMS that additional oversight or enforcement was needed to ensure MA plans complied with current and new regulations related to Medicare coverage determinations and prior authorization decisions. CMS as opted to address that concern by requiring plans establish a Utilization Management (UM) Committee and annually review of the plan’s UM policies and procedures for alignment.

Beginning with January 1, 2024, MA plans are prohibited from using any UM policies and procedures for basic or supplemental benefits unless they have been reviewed and approved by the plan’s UM Committee. Therefore, the UM Committee will need to be established prior to January 1, 2024 in order to conduct its review. Any policy not reviewed by this date cannot be used until such a review is complete.  Plans are permitted to change policies during a plan year but must give enrollees at least 30-days’ notice. This review can be conducted at the plan or organizational level. UM guidelines will be required to be based upon “current widely used treatment guidelines or clinical literature.”  The committee’s decisions regarding its UM policies must be documented and available to CMS upon request.

The UM committee must be led by a plan medical director. It must consist of a majority of practicing physicians, including at least one who is independent and conflict-free relative to the MA plan and/or organization; a physician with expertise in geriatric care or care for individuals with disabilities; and include members with a variety of clinical specialties.

The UM Committee must annually review the UM policies and procedures, including prior authorizations and coverage determinations to ensure compliance with traditional Medicare coverage criteria and other relevant clinical guidelines.

It remains to be seen how the new rules will play out in the real world. Will we see fewer care denials? And will we see a reduction in the number of prior authorization and reauthorization requests we need to submit? CMS has indicated a willingness to revisit the rules and make further changes if these rules prove ineffective in assuring MA enrollee access to Medicare services. For this reason, LeadingAge wants to hear from members when they see examples of plans not complying. Email Nicole Fallon with any examples. Provider members can also participate in our monthly Managed Care Solutions Network calls. To sign up, email Nicole Fallon.

CMS changed 19 areas of what plans and their agents/brokers can do in marketing to and communicating with beneficiaries to limit opportunities for deceptive marketing or misleading communications. LeadingAge will provide further details on these MA plan marketing and communications prohibitions in a future article closer to the September 30, 2023 implementation along with other member resources.

Interestingly, this final rule does not include all issues contained in the proposed rule. CMS indicated its intent, however, to issue subsequent final rules on some of the missing topics. In addition, CMS proposed another rule regarding interoperability and prior authorizations across all payers for which comments we due in March 2023 and we still await a final rule. For these reasons, we expect additional MA and prior authorization regulatory changes in the coming months.