What Prior Authorization Changes in MA Final Rule Mean for Providers

April 12, 2023 - CMS has released its 2024 Medicare Advantage (MA) and Part D Final Rule, which finalized policies on marketing oversight, prescription drugs, and prior authorization processes. Changes to prior authorization policies are particularly meaningful for providers and other healthcare stakeholders, who have been advocating for prior authorization reform for years. 

Prior authorization requirements create significant burdens for providers. According to data from the American Medical Association (AMA), physicians complete an average of 41 prior authorizations each week and spend an average of two business days on the processes.

What’s more, 93 percent of physicians reported that patients face delays in accessing necessary care while waiting for health plans to authorize treatment or services. Physicians have also indicated that prior authorization issues may lead patients to abandon treatment altogether.

Prior authorizations have been the top regulatory burden for medical practices for the past couple of years, the Medical Group Management Association (MGMA) reported. As of 2022, nearly 89 percent of practices had hired or redistributed staff to work exclusively on prior authorizations.

The following article breaks down the prior authorization changes included in the MA final rule, how providers are reacting, and what is to come for providers.

MA prior authorization changes

The MA and Part D final rule clarifies clinical criteria guidelines to ensure Medicare Advantage beneficiaries have access to the same care they would receive in traditional Medicare. CMS is requiring Medicare Advantage plans to comply with national coverage determinations, local coverage determinations, and general coverage and benefit conditions included in traditional Medicare regulations.

The agency also said that when Medicare coverage criteria are not fully established, Medicare Advantage plans may create internal coverage criteria based on current evidence in treatment guidelines or clinical literature.

The rule finalized requirements that aim to streamline the prior authorization process. CMS has stated that health plans can only use prior authorization to confirm the presence of a diagnosis or other medical criteria and ensure that an item or service is medically necessary.

The rule also directs coordinated care plans to provide a minimum 90-day transition period when a beneficiary undergoing treatment switches to a new Medicare Advantage plan, during which the new plan cannot require prior authorization for the active treatment.

Additionally, CMS is requiring all Medicare Advantage plans to review utilization management policies annually and ensure they align with coverage guidelines under traditional Medicare.

Lastly, the final rule requires that prior authorization approvals for a course of treatment remain valid for as long as medically necessary to avoid care disruptions in accordance with applicable coverage criteria, the patient’s medical history, and the provider’s recommendation.

With the finalized requirements, CMS aims to ensure beneficiaries have consistent access to medically necessary care while maintaining utilization management tools and their role in the Medicare Advantage program.

What providers are saying

After many calls for prior authorization reform, provider organizations have commended CMS for the requirements in the final rule.

AMA in particular has strongly advocated for prior authorization reform in the Medicare Advantage program.

“As the [AMA] continues to analyze the details of a new final rule that revises Medicare Advantage and the Medicare prescription drug benefit, an initial read suggests that the [CMS] has taken important steps toward right-sizing the prior authorization process imposed by Medicare Advantage plans on medical services and procedures,” Jack Resneck Jr., MD, president of AMA, said in a statement.

“The AMA applauds CMS Administrator Brooks-LaSure for leading the effort to include provisions in this final rule that will ensure greater continuity of care, improve the clinical validity of coverage criteria, increase transparency of health plans’ prior authorization processes, and reduce care disruptions due to prior authorization requirements.”

MGMA voiced similar thoughts.

“MGMA supports today’s action by CMS to finalize its proposals to reign in detrimental prior authorization practices, thereby strengthening the Medicare Advantage program,” Anders Gilberg, senior vice president of government affairs at MGMA, said in a statement emailed to RevCycleIntelligence.

“We are thankful that the agency heeded our call to finalize the continuity of care provision, limiting dangerous disruptions and delays to necessary patient care. By finalizing its proposal to require MA plans to form Utilization Management Committees, CMS will provide greater consistency across MA and Traditional Medicare’s coverage decisions and guidelines.”

Ashley Thompson, senior vice president of public policy analysis and development for the American Hospital Association (AHA), said that the trade organization appreciates CMS’ efforts to increase oversight of Medicare Advantage plans.

“Hospitals and health systems have raised the alarm that beneficiaries enrolled in some Medicare Advantage plans are routinely experiencing inappropriate delays and denials for coverage of medically necessary care,” Thompson stated. “This rule will go a long way in protecting patients and ensuring timely access to care, as well as reducing inappropriate administrative burden on an already strained health care workforce.”

An expert’s POV

Healthcare experts agree that the prior authorization rule is a big win for providers. The policies will help reduce administrative burden and align Medicare Advantage regulations with those under traditional Medicare, according to Christine Clements, a managed care regulatory attorney with the law firm Sheppard Mullin.

“It’s going to reduce or eliminate the potential result where you have different rules that apply for original Medicare beneficiaries versus Medicare Advantage,” Clements told RevCycleIntelligence.

“The final rule makes very clear that first and foremost original Medicare rules apply, and you only go to the internal clinical criteria if there are no rules under original Medicare, or those criteria leave open the possibility of applying additional criteria. That’s going to be really helpful in terms of just following one set of rules, which also will ease [providers’] administrative burden.”

According to Clements, there is no apparent downside to the rule for healthcare providers.

“Certainly, this final rule didn’t eliminate prior authorizations, so they’re still going to have to comply. But hopefully, that process will be a lot easier for them,” she said.

However, Clements did mention the proposed rule CMS released in December 2022 but has not yet finalized. The regulation would shorten the timeline for health plan decision-making for prior authorizations.

“That is something that providers need to keep in mind, that the same timelines still apply,” she pointed out.

Although some provider organizations have expressed wariness about CMS holding insurance companies accountable for following the new requirements, Clements is confident that the agency will follow suit.

CMS regularly audits plans, coverage determinations, and prior authorization use. In addition, members can file complaints with CMS, providing another mechanism for the agency to monitor compliance.

The prior authorization policies in the final rule do not take effect until January 1, 2024. However, some health plans have already limited their use of the process in the aftermath of various studies on prior authorization, including a report from the HHS Office of Inspector General.

“Providers can help themselves by making sure they’re familiar with the plan’s prior authorization requirements, so they know when a prior authorization is required and what the criteria are for meeting that prior authorization requirement to facilitate compliance,” Clements shared.

Additionally, increased adoption of gold carding by health plans could help incentivize provider compliance.

“Providers should be very happy with the final rule. Depending on the health plan, it could mean some major changes and impose a lot of new requirements on them. But we’ll have to wait and see how that all plays out,” Clements said.