2023-07115.pdf

the terms by which contracted health care providers are paid, and section 1854(a)(6)(B)(iii) of the Act and CMS regulations at  422.256(a)(2)(ii) prohibit CMS from requiring an organization to contract with a particular health care provider or to use a particular price structure for payment under such a contract. MA organizations have the flexibility to, but are not required to, incorporate value- based payment into their payment arrangements with providers, including the terms on which payments are made (for example, whether payment is available if prior authorization procedures have not been met). We consider participation in such payment arrangements to be a contractual matter between organizations and their contracted providers. Given these limitations, we do not believe CMS has the authority to adopt requirements for these contractual arrangements related to payment between MA organizations and contracted providers. As to the comment requesting that CMS require MA plans to make prior authorization criteria publicly available, we do not believe adopting that requirement in this rule is necessary. Currently,  422.111(b)(7) requires MA plans to disclose to enrollees any prior authorization rules and other review requirements that must be met in order to ensure payment for the services. In addition,  422.202(b)(2) requires MA plans that use a network of providers to communicate practice guidelines and utilization management guidelines to providers and, as appropriate, to enrollees. Finally, the proposed rule Medicare and Medicaid Programs; Patient Protection and Affordable Care Act; Advancing Interoperability and Improving Prior Authorization Processes for Medicare Advantage Organizations, Medicaid Managed Care Plans, State Medicaid Agencies, Childrens Health Insurance Program (CHIP) Agencies and CHIP Managed Care Entities, Issuers of Qualified Health Plans on the Federally Facilitated Exchanges, Merit-Based Incentive Payment System (MIPS) Eligible Clinicians, and Eligible Hospitals and Critical Access Hospitals in the Medicare Promoting Interoperability Program (Interoperability proposed rule), which appeared in the Federal Register on December 13, 2022, includes proposals to revise the timelines on which MA organizations make prior authorization decisions, to require use of an application programming interface to identify the covered items and services for which prior authorization is required and related documentation requirements, and for MA organizations to report certain metrics regarding use of prior authorization.106Given that proposed rule is pending and the scope of current requirements for MA organizations, we will continue to monitor this area to determine if additional requirements are necessary. Comment: Some commenters made recommendations regarding PA policies. Many of these commenters suggested CMS require MA plans to implement a number of PA standardizations including timelines, format, and content. Other commenters stated that CMS should standardize prior authorization requirements across all CMS programs. Some commenters requested that CMS establish standards for prior authorization requests in regards to both format and contents. Comments also suggested CMS establish standards regarding timelines for payers to response to requests. Some commenters requested CMS require MA plans to publicly post prior authorization denial rates. Another commenter requested that CMS clarify whether prior authorization policies or procedures that dictate specific definitions of medical diagnoses is considered more restrictive than Traditional Medicare. Response: We thank commenters for their suggestions. Existing regulations governing organization determinations, which include pre-service requests and prior authorization requests, address many of the issues raised by these commenters. Under the rules at  422.572(a)(1) related to an expedited organization determination request for a medical item or service (which could include an item or service subject to prior authorization), the MA organization must make its determination and notify the enrollee (and the physician involved, as appropriate) of its decision, whether adverse or favorable, as expeditiously as the enrollees health condition requires, but no later than 72 hours after receiving the request. For a standard organization determination request for a medical item or service (again, which could include an item or service subject to prior authorization), the rules at  422.568(b)(1) require the MA organization to notify the enrollee of its determination as expeditiously as the enrollees health condition requires, but no later than 14 calendar days after the date the organization receives the request for a standard organization determination. Under certain limited circumstances, an MA organization may extend these adjudication timeframes. Existing regulations also specify that when an MA organization denies an organization determination request for an item or service, the denial notice must use approved notice language in a readable and understandable form; state the specific reasons for the denial; inform the enrollee of his or her right to a reconsideration; describe both the standard and expedited reconsideration processes, including the enrollees right to, and conditions for, obtaining an expedited reconsideration and the rest of the appeal process; and comply with any other notice requirements specified by CMS. See  422.568(e) and 422.2267(e)(14) and (e)(16). We did not propose to change the timing requirements for organization determinations. In addition to these existing requirements that apply to organization determinations that involve PA, CMS recently released the Interoperability proposed rule,, which includes proposals to expand access to health information and streamline certain procedures used for prior authorization. The Interoperability proposed rule includes proposals requiring implementation of a HL7Fast Healthcare Interoperability Resources (FHIR) standard Application Programming Interface (API) for electronic access to certain information about pending and approved prior authorization requests, including the reason for a denial of a prior authorization request. In addition, there are proposals to require MA organizations to send decisions within 72 hours for expedited (that is, urgent) requests and seven calendar days for standard (that is, non-urgent) requests, and publicly report certain prior authorization metrics. We believe the proposals in the Interoperability proposed rule, if finalized, may address these commenters recommendations. As we continue to monitor the needs of the program, we will consider these comments for future rulemaking. Finally, in response to whether prior authorization policies or procedures that dictate specific definitions of medical diagnoses is considered more restrictive than Traditional Medicare, we consider coverage policies that dictate specific definitions of medical diagnoses to be additional coverage criteria that are only authorized in accordance with  422.101(b)(6) as finalized in this rule. We do not VerDate Sep<11>2014 21:20 Apr 11, 2023 Jkt 259001 PO 00000 Frm 00084 Fmt 4701 Sfmt 4700 E:\FR\FM\12APR2.SGM 12APR2ddrumheller on DSK120RN23PROD with RULES222203 Federal Register / Vol. 88, No. 70 / Wednesday, April 12, 2023 / Rules and Regulations consider internal coverage criteria authorized under  422.101(b)(6) to be more restrictive than Traditional Medicare when the requirements of that regulation are met. We believe that permitting the use of publicly accessible internal coverage criteria in these limited circumstances and contexts is necessary to promote transparent, and evidence-based clinical decisions by MA plans that are consistent with Traditional Medicare. Additionally, we are finalizing requirements at  422.137 that require MA plans UM committees to review all utilization management procedures used by the MA plan. Under these requirements, UM committees are required to ensure compliance with a number of MA rules, including approving only utilization management policies and procedures that use or impose coverage criteria that comply with the requirements and coverage standards at  422.101(b) and medical necessity criteria at  422.101(c)(1). Comment: Some commenters recommended that CMS clarify how we intend to enforce these new utilization management rules and the prior authorization requirements at new section  422.138. One commenter suggested CMS establish third party reviews of prior authorization denials. Another commenter suggested that CMS develop a process for providers to report when MA organizations are not following these rules. Response: We thank commenters. CMS currently monitors MA organization compliance with this existing policy through account management activities, complaint tracking and reporting, and auditing activities. These oversight operations alert CMS to any issues with access to care, and CMS may require MA plans to address these matters if they arise. CMS intends to continue these oversight operations to ensure MA organizations compliance with the final rule. Comment: Some commenters requested that CMS revise the proposed good cause language at 422.138(c), stating that the proposed language is too broad and may be interpreted too broadly by plans. Some commenters suggested that CMS should not continue to allow coverage decisions to be reopened under the provisions at  422.616. Another commenter suggested we revise  422.138(c) to state that . . . unless the MAO has evidence of good cause or fraud or similar fault to prevent plans from abusing their authority here. Response: We thank commenters for their comments and suggestions. Under the reopening rules at  422.616(a), an organization determination made by an MA organization is one of the types of decisions that may be reopened and revised by the MA organization under the rules in 42 CFR part 405, subpart I. The application of the reopening rules at  405.980(b) permit an MA organization to, among other reasons, reopen an organization determination within 1 year from the date of the initial determination for any reason; in addition, reopenings are permitted within 4 years for good cause; at any time to where there is reliable evidence that the initial determination was procured by fraud or similar fault; and for other specified reasons. However, under the new provision we proposed at  422.138(c), if an MA organization approved the furnishing of a covered item or service through a prior authorization or pre-service determination of coverage or payment, it may not deny coverage later on the basis of lack of medical necessity. We proposed that if the MA organization has the authority to reopen on the basis of good cause or fraud or similar fault, it may do so consistent with the rules at  422.616 which cross-reference the reopening rules at  405.980. An MA organization may reopen an approved organization determination made through a prior authorization or pre- service determination within 4 years from the date of the organization determination for good cause as defined in  405.986 or at any time if there exists reliable evidence as defined in  405.902 that the organization determination was procured by fraud or similar fault as defined in  405.902. Under new  422.138(c), an MA organization is not permitted to reopen an organization determination on the basis of a lack of medical necessity for any of the other reasons described in  405.980(b) (for example, for any reason within 1 year) if the approval was made pursuant to a prior authorization or pre-service organization determination process. In other words, an MA organization cannot subsequently reopen and revise such a decision on a later finding of a lack of medical necessity. We believe that the commenters suggested revision with respect to an MA organization having evidence of good cause or fraud or similar fault is redundant of what is already stated in the proposed regulation text and therefore, there is no need to revise the proposed regulation text exactly as suggested. However, for added clarity, we are finalizing the regulation text with modifications to make clear that the types of decisions contemplated in  422.138(c) cannot be reopened except for good cause (as provided in  405.986) or if there is reliable evidence of fraud or similar fault per the reopening provisions at  422.616. We further clarify in  422.138(c) that the definitions of the terms reliable evidence and similar fault in  405.902 of this chapter apply to this provision. Comment: Some commenters supported CMS decision not to propose an amendment to  422.136 and to, therefore, continue the current rules permitting step therapy for Part B drugs. Some commenters disagreed with CMS clarification that we did not authorize step therapy practices for Part A or Part B (non-drug) items or services as part of adopting the Part B drug step therapy regulation, and requested that CMS allow plans to apply step therapy to covered non-drug items and services. Other commenters expressed disappointment with CMS continued allowance of step therapy of Part B drugs and suggested that the continued allowance of step therapy for Part B drugs contradicts our proposal that MA plans not impose clinical criteria that are stricter than original Medicare. Some commenters requested that CMS more explicitly differentiate and explain the rules around step therapy for part B drugs and the step therapy for other non-drug Part A and B services, including DME. One commenter suggested that if CMS keeps step therapy for Part B drugs, we should require step therapy policies to be consistent with clinical guidelines and peer-reviewed supporting evidence, adopt certain Part D oversight policies, and require plans to disclose all step therapy policies to beneficiaries before enrollment. This commenter also requested that CMS prohibit plans from requiring an off-label Part B drug when an on-label drug is available. Response: We thank commenters for expressing their comments and concerns. To clarify, the utilization management policies discussed in this rule do not limit MA organizations ability to use step therapy for Part B drugs when it is permitted under  422.136. Under this final rule, certain utilization management processes, such as clinical treatment guidelines that require an item or service (that is not a Part B drug) to be furnished prior to receiving the requested item or service, would violate  422.101(b) and (c), and thus, those utilization management processes are prohibited unless it is specified within the applicable NCD or LCD or Medicare statute or regulation when Traditional Medicare coverage criteria are fully established. When Traditional Medicare coverage criteria are not fully established under VerDate Sep<11>2014 21:20 Apr 11, 2023 Jkt 259001 PO 00000 Frm 00085 Fmt 4701 Sfmt 4700 E:\FR\FM\12APR2.SGM 12APR2ddrumheller on DSK120RN23PROD with RULES222204 Federal Register / Vol. 88, No. 70 / Wednesday, April 12, 2023 / Rules and Regulations 107https://www.kff.org/medicare/issue-brief/over- 35-million-prior-authorization-requests-were-