CMS Releases FAQs Clarifying 2024 Medicare Advantage Final Rule

closeup of a Medicare health insurance card with a paperclip

Last week CMS released frequently asked questions (FAQs) pertaining to coverage criteria and utilization management requirements in the 2024 Medicare Advantage (MA) final rule. The requirements in the final rule are intended to create parity between MA and Traditional Medicare, enhance beneficiary protections, and increase program oversight. There are 14 FAQs providing clarification on several areas, including interrupted stays, algorithms and artificial intelligence (AI) use in determining length of stays and terminating care, post-payment audits and denials of payment for authorized services, use of prior authorizations, and enforcement. These topics were part of the ask by AHCA and the coalition of long-term and post-acute care associations and the Center for Medicare Advocacy in its letter submitted on November 29, 2023, and meeting with CMS on January 3, 2024.  

Highlights include:   

• Algorithm or AI Use (Q2): CMS provides definitions of algorithms and (AI) and notes that it’s use is not prohibited, but it is the MA plan’s responsibility to ensure that the usage is compliant with applicable rules which includes coverage of basic benefits and assessment of medical necessity. CMS provides a specific example related to post-acute care stating: “In an example involving a decision to terminate post-acute care services, an algorithm or software tool can be used to assist providers or MA plans in predicting a potential length of stay, but that prediction alone cannot be used as the basis to terminate post-acute care services. For those services to be terminated in accordance with § 422.101(c), the patient must no longer meet the level of care requirements needed for the post-acute care at the time the services are being terminated, which can only be determined by re-assessing the individual patient’s condition prior to issuing the notice of termination of services. CMS also expressed concern about AI perpetuating discrimination or bias.” 
• Denial of Physician Ordered, Coverage Appropriate Post-Acute Care Following Hospitalization (Q7): An MA plan cannot deny a physician-ordered admission to a SNF or redirect care following a hospitalization if it would be covered under Traditional Medicare. However, MA plans are permitted to offer coverage to alternatives and the enrollee may choose to do so. When terminating services, it is the MA plan’s responsibility to demonstrate that the termination is appropriate and the MA plan “must supply a specific and detailed explanation why services are either no longer reasonable and necessary or are no longer covered, including a description of the applicable coverage criteria and rules.”  
• Post-Payment Audits and Denials of Payment for Authorized Stays (Q9): Once a prior authorization is provided by an MA plan, the MA plan may not deny payment based on lack of medical necessity and may not “reopen such a decision except for good cause.” Plans can conduct post-claim reviews, consistent with the reopening rules. 
• Interrupted Stays (Q10): CMS explicitly describes the SNF Medicare Interrupted Stay policy and states that if an MA plan imposes a prior authorization and the stay falls within the interrupted stay policy, then the MA plan may not impose a new prior authorization requirement. However, CMS notes that unlike fee-for-service where the variable per diem adjustment is not reset, this policy does not govern MA rates for contracted in-network providers. On the other hand, for out of network providers, MA plans are required to follow SNF PPS policy. 
• Use of Prior Authorizations (Q11): Plans are permitted to use prior authorizations (PAs) except in certain circumstances. However, as finalized in the rule, prior authorizations may only be used to confirm the presence of diagnosis or determine medical necessity or in the case of supplemental benefits clinical appropriateness. PAs must be valid for the course of treatment and cannot be imposed on new enrollees in active course of treatment for 90 days. PAs must be provided as “expeditiously as the enrollee’s health condition requires”, but no later than 14 days for non-expedited requests and 72 hours for expedited. 
• Use of Internal Coverage (Q1): CMS reiterated that internal coverage criteria for basic benefits may only be used in the absence of fully established Traditional Medicare coverage criteria (applicable Medicare statutes, regulations, National Coverage Determinations (NCDs) or Local Coverage Determinations (LCDs) and must be publicly accessible. 
• Public Accessibility of Internal Coverage Criteria (Q3): CMS defines “publicly accessible” as available to everyone, not just the plan’s enrollees or contracted providers via the plan’s website (not behind a paywall or through subscription access). However, the requirement for “one or two pieces of basic information” is acceptable. CMS notes that it will be tracking plans using multiple vendors and the potential burden of multiple links on the plan’s website, although CMS is not restricting it at this time.  
• Definition of “Widely used treatment guidelines or clinical literature” (Q4): CMS defines current evidence of “widely used treatment guidelines are those developed by organizations representing clinical medical specialties and refers to guidelines for the treatment of specific diseases or conditions.” A direct link to the citation or information is required. CMS notes that if internal coverage criteria is unsupported as described, plans are prohibited from using it in spite of the absence of fully established Traditional Medicare coverage criteria. 
• Internal Criteria Usage Clinical Benefits Must Outweigh Harm (Q5): In its use of internal coverage criteria, CMS expects plans to demonstrate (publicly facing) that the clinical benefits outweigh the harm, including by delays or decreased access to services. This must be done at the patient population level. 
• Scope of LCD Pertinent Only to MA Plan Service Area (Q6): MA plans may not apply Medicare local coverage determinations inconsistent with the plan’s service area. MA plans may use LCDs beyond geographic scope only in the absence of fully established Medicare criteria, but the internal coverage criteria rules apply. 

As a reminder, AHCA is hosting a webinar on February 27 at 1:00pm ET on the new rules.  

For questions, please contact Nisha Hammel.  

Source: AHCA/NCAL