On April 12, 2023, the Centers for Medicare & Medicaid Services (CMS) released the 2024 Final Rule in the Federal Register (2024 Final Rule). Among other provisions, the Final Rule made updates to Utilization Management Requirements including Clarifications of Coverage Criteria for Basic Benefits, Use of Prior Authorization, Additional Continuity of Care Requirements, and Annual Review of Utilization Management Tools (§§ 422.101, 422.112, 422.137, and 422.138) that became effective on January 1, 2024.
CMS announced in the HPMS Memo released December 19, 2023, that in addition to the usual Program Audit schedule, they would conduct focused audits targeting these new UM requirements in 2024. These audits kicked off in mid-January and have targeted both organizational determinations and appeals (ODA) and compliance program effectiveness (CPE). These reviews are designed to ensure that Sponsors have implemented the Final Rule provisions including:
- The application of internal coverage criteria only when coverage criteria are not fully established
- The public availability of internal coverage criteria
- Ensuring that Sponsors are using physicians and health care professionals with appropriate level of expertise for the cases under review
- Ensuring Sponsors are abiding by required continuity of care provisions for enrollees
- Review of the establishment and effectiveness of the UM Committee to ensure it meets regulatory requirements in membership, responsibilities, and functions
- The appropriate compliance oversight of UM functions
While the CPE and ODA components of the UM focused audits are similar to the Program Audit, there are some key differences of which Sponsors should be aware:
- The CPE review includes gathering of the Organizational and Governance presentation, the COA universe, supporting risk assessments and work plans, the Compliance Officer questionnaire (with some questions removed) and FDR questionnaire but allows the Plan to focus submitted documentation on UM activities that are relevant to the review.
- The two tracer samples for CPE have not been selected from the COA universe but rather distributed to Sponsors uniformly, with one focused on the UM Committee and the other focused on implementation of the UM requirements. Plans should take note that because of the limited scope of the CPE portion of the UM focused audit, CMS has confirmed this will not count toward fulfillment of the Plan’s annual compliance program review requirement (as a full program audit would).
- The ODA portion of the audit includes the submission of CMS ODAG Audit Protocol Tables 1 through 3 but has also added a required Table 7 (Termination of Home Health Agencies, Skilled Nursing Facilities, and Comprehensive Outpatient Rehabilitation Facilities (TERM) Services) that requires Plans to provide information on Quality Improvement Organization (QIO) cases following a Sponsors decision to terminate services.
- The ODA portion of the review includes 30 samples selected from Tables 1 through 3, and 10 additional samples from Table 7 that are used to evaluate clinical decision-making, the application of criteria, UM committee approval of related policies and procedures, and the public availability of criteria utilized where applicable.
The Audit Process
The CMS audit process has put a heavy focus on the structure and function of the UM Committee, Sponsor implementation activities related to the new UM requirements, and a very detailed clinical case review to ensure compliance in the decision-making process. A few key observations should be noted:
- CMS is conducting the UM focused audit, both CPE and ODAG, over the course of one week, with all CMS auditors attending all sessions. CPE governance structure review and Tracer presentations have led the audit week, followed by the ODAG sample reviews before returning to the Compliance Officer and FDR Oversight on-camera interviews at the end of the audit timeframe. The level of review is extremely detailed, and Sponsors should be prepared for the audit to take the entire week, and potentially longer.
- Tracer reviews have been directed toward the specific requirements for UM Committee membership and responsibilities as evidenced by the Sponsor’s implementation, committee charter and committee reporting structure. Sponsors should be prepared to discuss and show clear evidence that all internal and FDR UM policies were inventoried and reviewed prior to January 1, 2024, and that Compliance can clearly demonstrate how the implementation process was overseen. Public accessibility of criteria has been a key discussion point, and Sponsors must be prepared to show how this access has been achieved.
- ODAG case discussions are putting heavy scrutiny on the Sponsor’s clinical review process to ensure that the medical director(s) can clearly describe the criteria utilized, the rationale for use of internal criteria where applicable and demonstration that decisions are based on the individual enrollee circumstances, and the clear communication and availability of the criteria used.
What’s next?
To ensure audit readiness for 2024, for both Program Audits and potential UM-focused audits, Plan Sponsors should consider implementing the following next steps:
- Plan Sponsors should review the implementation of the Final Rule requirements, ensuring that full documentation of steps taken to comply is available and that all regulatory requirements have been met.
- Did the Sponsor establish a UM committee (or leverage an existing one), defined the committee responsibilities and membership in accordance with the final rule?
- Has the Committee reviewed and approved all UM policies and procedures (internal and delegate) that are in use as of 1/1/2024?
- Has the Sponsor evaluated its prior authorization procedures, clinical reviewer expertise and case assignments, and continuity of care processes to ensure compliance with the Final Rule?
- Can the Sponsor demonstrate its implementation steps, training and communication activities related to the Final Rule?
- Has the Sponsor made its internal coverage criteria are publicly accessible and can this be demonstrated?
- Has the Sponsor deployed monitoring and auditing within UM and Compliance specific to Final Rule requirements and is there a process in place to initiate corrective action when needed?
- Plan Sponsors should ensure that their CPE documentation is easily filtered to show UM-focused monitoring and auditing activities and that appropriate monitoring is in place to ensure ongoing compliance with the new UM requirements.
- Plan Sponsors should develop a process to pull needed information for the new ODAG Table 7, which will require identification of QIO cases with decisions, date of notification by the QIO of enrollee fast track appeals, date the detailed Explanation of Non-Coverage (DENC) was provided to enrollee. and an explanation of the reason for non-coverage.
- Coordinate with delegated entities to ensure they understand the Final Rule, that any delegate policies requiring UM Committee review have been submitted and approved, and that internal clinical criteria is publicly available.
- Ensure enrollees and providers understand how to access internal coverage criteria, and that the Sponsor website includes this information in a public facing, accessible format.
Want to Help Ensure Your Plan is Ready for a UM- focused audit?
We can perform mock audits of your Plan’s and delegates implementation of the Final Rule requirements to detect areas requiring corrective action, help your Plan define and implement effective corrective actions where necessary, and assist your Plan with developing a prevention plan of ongoing monitoring and auditing to help minimize the ongoing risks of non-compliance. We can also support your Plan if a CMS UM-focused audit notice is received by reviewing documentation prior to submission, providing support during audit sessions, and assisting with any needed corrective actions following your audit.
Contact us today at (630) 694-5215 or email us at [email protected].
