2024 Final Rule Changes: Impacts on Utilization Management Tools and Proposed Changes for 2025.

The Final Rule 2024 is one of the most substantive in recent years, with clarifications, codifications to existing rules and new requirements!  Plans need to be well prepared this year to  ensure that utilization management (UM) strategies adhere to the updated guidance provided in the final rule (CMS-4201-F) issued by the Centers for Medicare & Medicaid Services (CMS) on April 12, 2023, which become effective January 1, 2024.  In the HPMS memo dated October 24,2023 CMS notified MA Plans that beginning in January 2024 the Medicare Parts C and D Oversight Enforcement Group (MOEG) will begin conducting both routine and focused audits to assess compliance with the new UM requirements.

UM tools, which include prior authorization, are designed to assist Plans in determining medical necessity for services. These tools serve to contain costs while also protecting enrollees from receiving unnecessary care. There are three key areas we want to point out:

1. Coverage Criteria for Basic Benefits and Use of Prior Authorization,
2. Continuity of Care Requirements and Prior Authorization, and
3. Annual review of UM processes and tools.

CMS continues to propose changes in UM requirements and these tools will ensure Plan success in clinical oversight.

Coverage Criteria for Basic Benefits and Use of Prior Authorization

This section clarifies and codifies existing guidance.  CMS requires that all enrollees in Plans have access to the same basic benefits afforded to enrollees in Traditional Medicare. Prior authorization policies can continue to be utilized but may only be used to confirm the presence of diagnoses or other medical criteria and/or ensure that an item or service is medically necessary.  When making medical necessity determinations Plans must first utilize national coverage determinations (NCD), local coverage determinations (LCD), and general coverage and benefit conditions included in Traditional Medicare. Plans cannot deny coverage of basic benefits utilizing an internal proprietary or external coverage policy when fully established coverage criteria exist.

Plans cannot be more restrictive than fully established Medicare existing coverage criteria.  CMS guidance for use of step therapy policies for Part B drugs under certain circumstances, clinical treatment guidelines that require another item or service be furnished prior to receiving the requested item or service is prohibited unless specified within an applicable NCD, or LCD.  When coverage criteria are not fully established in Medicare statute, regulation, NCD, or LCD, MA organizations may establish plan medical necessity criteria based on publicly accessible coverage criteria, current evidence in widely used treatment guidelines or clinical literature.

CMS’s expectation is that coverage criteria created by Plans is publicly accessible and includes a summary of the evidence considered during development, a list of sources of the evidence and includes an explanation of the rationale that supports adoption of the coverage criteria used to make a medical necessity determination.  Evidence considered during development should be widely used treatment guidelines that are developed by organizations representing clinical medical specialties (for example, in the absence of established Medicare criteria, Infectious Diseases Society of America, American Society of Addiction Medicine Criteria (ASAM), National Cancer Care Network (NCCN) guidelines for oncology guidelines may be used).  CMS expects clinical literature to be of high quality and to include large, randomized controlled trials or cohort studies or all -or-none studies with clear results, published in a peer-reviewed journal.  CMS does not allow evidence that is unpublished, is a case series report, or is derived solely from internal analysis within the MA organization.

The use of prior authorization, which includes all policies and procedures utilized, is one tool which assists Plans in coordinating care, determining medical necessity of services, and minimizing the furnishing of unnecessary services. In adopting the Final Rule, CMS seeks to ensure that enrollees have access to all benefits allowed under Traditional Medicare and that prior authorization isn’t utilized to create barriers to appropriate treatment. Prior Authorization should only be used to confirm the presence of diagnoses or other medical criteria and ensure that services requested are clinically appropriate and medically necessary.  All relevant clinical information must be used by the Plan to render a decision. Medical Directors should be involved to ensure the clinical accuracy of medical necessity decisions when appropriate.

Continuity of Care Requirements and Prior Authorization

This part of the rule includes new requirements for transition of new enrollees during an active course of treatment!

Prior authorization is now prohibited for a minimum 90-day transition period for any active course(s) of treatment when an enrollee has enrolled in a Plan after starting a course of treatment even if the service is furnished by an out-of-network provider.  The final rule does not mean that the active course of treatment must last for the full 90-days, rather this means that the new plan may not subject an active course of treatment to an additional prior authorization for a period of 90-days, beginning the day enrollment of the new plan becomes effective.

The final rule requires that if an Plan (or for new enrollees, the previous Plan) has approved a prescribed or ordered course of treatment or service for which the duration is 90 days, then the prior authorization approval must apply to the full 90 days and Plans may not subject this treatment or service to additional prior authorization requirements before the completion of the approved 90 days of treatment or service.

The final rule allows Plans to utilize prior authorization but requires minimum continuity and coordination of care requirements. CMS’s expectations are that the Plan and the contracted provider will coordinate care to ensure that the prior authorization is approved for a period that ensures that care is delivered for as long as is medically necessary and that it minimizes disruptions in care for the enrollee.

A prior authorization request for a course of treatment must be valid for as long as medically necessary to avoid disruptions in care in accordance with applicable coverage criteria, the patient’s medical history and the treating provider’s recommendation. CMS is not requiring a minimum or maximum number of days for a course of treatment, since the necessary scope and duration of a course of treatment can vary widely from enrollee to enrollee and should be based upon the individual’s needs.  A Plan may approve and authorize treatment for a different period than the treating providers ordered course of treatment if the Plan determines that what was ordered or prescribed by the treating provider was not medically necessary or appropriate based on the enrollee’s diagnosis or condition.  However, Plans should not shorten authorization periods that are outlined in Traditional Medicare coverage criteria unless the change is consistent with the relevant criteria.

This will have impacts to preservice as well as payment processes and Plans must be able to identify those new enrollees who are in an “active course of treatment” to prevent disruption to care.

Annual Review of UM Processes and Tools

This requirement is simply a codification of existing guidance. The final rule requires Plans to establish a UM Committee which is chaired by the Plan’s Medical Director.  The committee responsibilities include the expectation that they annually review all UM policies, including those which require prior authorization, and ensuring that they are consistent with the coverage requirements including current, NCD, and LCD guidelines. CMS’s expectations include any policy used by the Plan whether developed or managed by a third-party entity or delegate.  The Plan may not use any UM policies for basic or supplemental benefits on or after January 1, 2024, unless those policies and procedures have been reviewed and approved by the UM committee.  Additionally, the committee must document in writing the reason for its decisions regarding development of UM policies and make this documentation available to CMS upon request.

The UM committee must include a majority of members who are practicing physicians, including at least one that is independent and free of conflict relative to the MA organization and Plan and one that is an expert in the care of elderly or disabled individuals. Additional physician members should be of varied clinical specialties such as primary care, behavioral health, etc. Plans are encouraged to include an enrollee representative to their UM committee.