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New Medicare rule streamlines prior authorization in Medicare Advantage plans


 

A new federal rule seeks to reduce Medicare Advantage insurance plans’ prior authorization burdens on physicians while also ensuring that enrollees have the same access to necessary care that they would receive under traditional fee-for-service Medicare.

The prior authorization changes, announced this week, are part of the Centers for Medicare & Medicaid Services’ 2024 update of policy changes for Medicare Advantage and Part D pharmacy plans

Medicare Advantage plans’ business practices have raised significant concerns in recent years. More than 28 million Americans were enrolled in a Medicare Advantage plan in 2022, which is nearly half of all Medicare enrollees, according to the Kaiser Family Foundation.

Medicare pays a fixed amount per enrollee per year to these privately run managed care plans, in contrast to traditional fee-for-service Medicare. Medicare Advantage plans have been criticized for aggressive marketing, for overbilling the federal government for care, and for using prior authorization to inappropriately deny needed care to patients.

About 13% of prior authorization requests that are denied by Medicare Advantage plans actually met Medicare coverage rules and should have been approved, the Office of the Inspector General at the U.S. Department of Health & Human Services reported in 2022.

The newly finalized rule now requires Medicare Advantage plans to do the following.

  • Ensure that a prior authorization approval, once granted, remains valid for as long as medically necessary to avoid disruptions in care.
  • Conduct an annual review of utilization management policies.
  • Ensure that coverage denials based on medical necessity be reviewed by health care professionals with relevant expertise before a denial can be issued.

Physician groups welcomed the changes. In a statement, the American Medical Association said that an initial reading of the rule suggested CMS had “taken important steps toward right-sizing the prior authorization process.”

The Medical Group Management Association praised CMS in a statement for having limited “dangerous disruptions and delays to necessary patient care” resulting from the cumbersome processes of prior approval. With the new rules, CMS will provide greater consistency across Advantage plans as well as traditional Medicare, said Anders Gilberg, MGMA’s senior vice president of government affairs, in a statement.

Peer consideration

The final rule did disappoint physician groups in one key way. CMS rebuffed requests to have CMS require Advantage plans to use reviewers of the same specialty as treating physicians in handling disputes about prior authorization. CMS said it expects plans to exercise judgment in finding reviewers with “sufficient expertise to make an informed and supportable decision.”

“In some instances, we expect that plans will use a physician or other health care professional of the same specialty or subspecialty as the treating physician,” CMS said. “In other instances, we expect that plans will utilize a reviewer with specialized training, certification, or clinical experience in the applicable field of medicine.”

Medicare Advantage marketing ‘sowing confusion’

With this final rule, CMS also sought to protect consumers from “potentially misleading marketing practices” used in promoting Medicare Advantage and Part D prescription drug plans.

The agency said it had received complaints about people who have received official-looking promotional materials for Medicare that directed them not to government sources of information but to Medicare Advantage and Part D plans or their agents and brokers.

Ads now must mention a specific plan name, and they cannot use the Medicare name, CMS logo, Medicare card, or other government information in a misleading way, CMS said.

“CMS can see no value or purpose in a non-governmental entity’s use of the Medicare logo or HHS logo except for the express purpose of sowing confusion and misrepresenting itself as the government,” the agency said.

A version of this article first appeared on Medscape.com.

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