As 2024 comes to a close, the Centers for Medicare & Medicaid Services (CMS) Utilization Management (UM) requirements remain as high priority, and 2025 brings with it new considerations for Plan Sponsors.
UM Requirements: 2024 Recap
Through 2023 and well into 2024, Plan Sponsor stook on the heavy lift of implementing new utilization management requirements as outlined in the 2024 Final Rule. The 2024 CMS audit season brought with it a heavy UM focus in both program audits and new UM-focused reviews. CMS audit findings focused on key components of the Final Rule including:
- UM Committee structure and operation
- Timely review and approval of internal coverage criteria
- Public accessibility of internal coverage criteria, and
- Appropriate clinical decision-making by clinical reviewers with relevant expertise and Medicare UM experience, utilizing the correct criteria and with consideration to the clinical information provided.
Audit findings related to UM generally stemmed from a committee membership and structure issues, failures to complete timely criteria review and approvals, and is some cases, misinterpretation of the Final Rule and CMS expectations regarding the inclusion of delegate and third-party vendor criteria.
- Misidentification, misclassification, and or incorrect processing of requests for ODs, reconsiderations, or grievances and failure to ensure appropriate processing regardless of how the request was initially classified.
- Inappropriate dismissals that should have been processed as a coverage request or grievance due to incorrect application of representation documentation requirements to entities for which they did not apply.
Utilization Management: Additional Requirements for 2025
The CMS focus on UM will continue next year. The 2025 Final Rule provides for additional requirements for the UM Committee in terms of membership and function including:
- At least one member of the UM committee has expertise in health equity
- The UM committee conduct an annual health equity analysis of the use of prior authorization and its impact on enrollees with one or more of the following social risk factors (SRF):
- Receipt of the low-income subsidy or being dually eligible for Medicare and Medicaid (LIS/DE); or
- Having a disability
- MA organizations provide the results of the analysis publicly available on their website in a manner that is easily accessible and without barriers.
By January 1, 2025, Sponsors should have a designated health equity member on their UM Committee and be underway in conducting their health equity analysis to ensure that the report is publicly available by July 1, 2025.
The 2025 Final Rule also transitions the process for review and handling of untimely fast-track appeals of an Sponsors decision to terminate services in a Home Health Agency, Skilled Nursing Facility, or Comprehensive Outpatient Rehabilitation Facility (HHA, SNF or CORF) from the Sponsor Plan to the quality improvement organization (QIO) and eliminates the current provision requiring the forfeiture of an enrollee’s right to appeal a termination of services decision when they leave the facility. Both of these provisions will require Sponsor awareness and potential modification to its internal appeal processes.
Finally, in September 2024, CMS issued a new proposed UM reporting requirement and audit protocol for industry review and comment. If finalized, this will create an annual coverage criteria reporting process for Sponsors to submit such criteria to CMS, and a new audit process that evaluates the internal coverage criteria that Sponsors use. With CMS projecting that it may conduct 40 such audits annually if finalized, both the coverage criteria reporting and supporting audit protocol may be key considerations for Sponsor UM departments in the coming year.
UM Requirements: Compliance Checklist
To ensure that Plan Sponsors are compliant with both the 2024 and 2025 UM requirements, Plan Sponsors should consider the following:
Evaluate compliance with UM requirements
- Review UM Committee membership to leadership by the Medical Director, the appropriate balance of practicing physicians, a member with no conflict, and a member with expertise in health equity.
- Ensure Internal Coverage Criteria has been reviewed and approved by the UM Committee as part of the annual review process.
- Ensure delegate and third-party criteria have been confirmed and approved by the UM Committee.
- Ensure minutes and decisions of the UM Committee have been appropriately documented and are readily accessible for review and audit.
- Ensure development of the health equity report is underway to achieve compliance with public availability by July 1, 2025.
- Ensure internal coverage criteria are not more restrictive than Traditional Medicare’s national and local coverage policies, which may require ongoing review to identify any new or updated CMS policies, national or local coverage determinations (NCD/LCD) that may make internal coverage criteria incorrect or unnecessary.
- Validate public accessibility of all internal coverage criteria and establish a plan to continue validation of access on an ongoing basis.
- Implement / maintain UM decision making accuracy reviews to ensure the appropriateness of coverage decisions and accuracy of denial notifications.
- Evaluate and modify if needed appeal processes that may require change as a result of the handling of fast-track appeals by the QIO.
- Take note of the HPMS memo issued November 18, 2024 “Updated Parts C & D Enrollee Grievances, Organization/Coverage Determinations, and Appeals Guidance and Part C and D Standardized and Model Notices” and ensure that all templates are updated prior to January 1, 2025.
- Review the CMS proposed UM reporting and new audit protocol for evaluation of coverage criteria to ensure that if finalized, the Sponsor can readily produce the required reporting in the CMS required format by January 31, 2025 and can complete the required audit universe and supporting materials if a CMS audit engagement notice is received.
UM compliance and audit readiness is a year-round process. BluePeak can help!
UM compliance and audit readiness is a year-round process. BluePeak can assist in evaluating compliance in your UM program and can assist in completing a mock audit to mirror a CMS program audit, UM focused audit, or coverage criteria audit. Performing a compliance evaluation or mock audit helps to identify potential areas of compliance risk and ensure readiness for the 2025 CMS audit season. Contact [email protected] for more information!
