Choice Medical

Daily Tip:

CMS has had a lot to say about Medicare Advantage Plans (MAPs) and their liberal interpretations of the Medicare rules that govern them. There is the Medicare Managed Care Manual, Final Rule CMS-4201-F, and a series of FAQs targeted to the MAPs.

Most suppliers are at least vaguely aware that CMS is clamping down on MAPs that use unpublished internal rules and non-compliant protocols to delay or discourage medically necessary care for enrollees.

Even still, there is an elemental question that keeps popping up:

Can MAPs still require prior authorization?

Can MAPS Require Prior Authorization?

The short answer is yes.

Though CMS has curbed certain abuses of the process, the agency has not forbidden MAPs from using prior authorization altogether. In FAQ #11 published in February 2024, CMS addresses the question directly. They write:

“Prior authorization may only be used by [MAPs] to confirm the presence of a diagnosis or other medical criteria, to ensure that the furnishing of a service or benefit is medically necessary or, for supplemental benefits, clinically appropriate (Sec. 422.138(b)).”

Notwithstanding, the agency further stipulates prior authorization is not appropriate for:

  • Emergency, urgently needed, or stabilization services.
  • Out-of-network services covered by a MAP-sponsored PPO plan.
  • Medicare Advantage Private Fee For Service or Medical Savings Account plans.

The 90-Day Transition Period for New Enrollees on Active Service

MAPs are well within the rules to use the prior authorization process to gather medical records and other information that supports a proposed service is medically necessary per Medicare coverage criteria before providing reimbursement.

There is one exception.

In cases where MAPs enroll a new Medicare beneficiary engaged in active care covered by their prior insurance plan, the new MAP cannot require prior authorization or enforce network requirements on those active services for 90 days. CMS initiated this rule so a simple change in plans would not disrupt care. The goal of the transition period is to allow the beneficiary and their active caregivers time to complete any new prior authorization process and make the transition to an in-network supplier.

Approved Authorizations Must Remain Valid as Long as the Treatment is Medically Reasonable and Necessary

To avoid disruptions in care, MAPs must honor approved authorizations for as long as the service is medically reasonable and necessary.

That means MAPs cannot randomly impose re-authorization on recurring services. They can, however, require re-authorization where Medicare Fee For Service (FFS) establishes compliance at specific intervals. For example, MAPs can require a new authorization after a three-month CPAP trial. In this case, as in others spread throughout various product LCDs, MAPs can mirror the FFS precedent for continued coverage. Absent the precedent, MAPs must honor the initial authorization until the medical need ends.

We hope this helps frame the rules governing permissible prior authorization requirements. Our ultimate goal is to provide suppliers with confidence to challenge MAPS that continue to deny claims using procedures that violate CMS’s explicit rules.

Can MAPs use post-claim audits to deny payment of a prior authorized service?

In response to this question posed in FAQ #9, CMS wrote:

“If a MAP approved the furnishing of a covered item or service through a prior authorization … it may not deny coverage later on the basis of lack of medical necessity and may not reopen such a decision for any reason except for good cause … or if there is reliable evidence of fraud or similar fault.”

CMS has raised the bar pretty high for MAPs to walk back its own prior authorization decisions. Good cause requires new and material evidence that:

  • Would result in a different conclusion, and
  • Was not available to or known by the MAP at the time of the prior authorization decision.

We expect CMS’s clarity will significantly reduce what has been a longstanding supplier frustration in working with Medicare Advantage Plans.

Prior Authorization Decision Times

In general, the Rule requires most targeted payers to send decisions for expedited prior authorization requests within 72 hours. They have seven calendar days to render decisions for non-urgent authorization requests.

While three days seems slow for urgent requests, it is a good starting point. The Rule contains other provisions, slated for 2027, that will standardize prior authorization transactions with healthcare providers. I suspect the turnaround requirements will get shorter as technology permits.

Unfavorable Decisions

CMS will require targeted plans to include denial reasons for all unfavorable authorization decisions beginning in 2026. This seems obvious, but I suppose the agency needed to be explicit. From an operational standpoint, this provision should:

  • Make it easier to determine if unfavorable decisions are compliant with CMS rules and regulations, and
  • Help suppliers communicate clearly with patients.

The Final Rule Targets MAPs and Other Federally Funded Insurance Payers

The Rule goes beyond the watchful eye CMS and federal watchdog agencies have had on MAPs for some time. CMS is addressing transparency and consistency for a much broader beneficiary population. As such, the prior authorization mandates apply to:

  • MAPs.
  • Medicaid FFS and managed care plans.
  • Childrens’ Health Insurance Plan (CHIP) FFS and managed care plans.
  • Qualified Health Plans (QHPs) offered on federally facilitated exchanges.

Effective Dates

The prior authorization mandates are effective on January 1, 2026, for MAPs, Medicaid FFS, and CHIP FFS programs. For managed care plans and QHPs, the provisions apply to rating periods or plan years beginning on or after January 1, 2026.

priorauth #map #advantage

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