Must-See CMS Guidance: How Medicare Advantage Makes Coverage Decisions

 Header:  This week, HHS issued a guidance letter on how Medicare Advantage plans can make coverage decisions.  One aspect of the letter is "AI," but there are also general rules.  Anyone working in Medicare reimbursement will want to review all 14 pages.  

See also a Hill hearing on AI and Medicare Advantage.

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CMS issued guidance to Medicare Advantage programs on how they can make claims-processing and policy coverage decision.   While this garnered some headlines due to the paragraphs around uses of AI in Denials, it's also a broader document that cites to regulations created about a year ago.

• See  42 CFR 422.101.
• Guidance https://cdn.arstechnica.net/wp-content/uploads/2024/02/cms-memo-2624-faqs-related-to-coverage-criteria-and-utilization-management-requirements-in-cms-final-rule-cms-4201-f.pdf
• News article.  https://arstechnica.com/science/2024/02/ai-cannot-be-used-to-deny-health-care-coverage-feds-clarify-to-insurers/
• News articles at STAT (2023, 2024):
• https://www.statnews.com/2023/03/13/medicare-advantage-plans-denial-artificial-intelligence/
• https://www.statnews.com/2024/02/07/government-warns-medicare-advantage-insurers-not-to-deny-care-based-on-ai/
• See John Warren's essay on the CMS letter, here.
• CMS is also running a Medicare Advantage request for information, active to May 24, 2024, here.  CMS had previously run an RFI on MA in 2022.

This the regulation is rather dense (422.101), this 14 page PDF from CMS may be easier reading and more understandable, and includes clarifications.  

Types of Stuff in the Letter

The guidance in the 14 page letter includes how MA plans can decide internal coverage policies, how much need be public, and how prior auth is applied.

Regarding guidelines, we read: "MA organizations may not add coverage criteria that are not supported in such guidelines or literature, or change the substantive recommendations contained in such guidelines or literature to support coverage criteria."  Issues such as reopening an already-approved prior auth benefit, are also discussed in detail.

Nerd note.

Some of this used to be program manual text (and may still be), and the policy was "upgraded" to the force of a regulation last year.   

I noticed that the program manual text referred to following NCDs, LCDs, and program manual instructions.  When they converted this to regulations, they refer only to NCDs and LCDs.  I assume the lawyers drafting the regulation did not want to imply that program manual instructions had the force of law (since they appear suddenly, lack public comment, etc).  

The program manual text also had a clarification [Manual 100-16_4-90.4.1] that if one local LCD had the equivalent of national jurisdiction (for a sole source lab that serves patients in all states), then that LCD applied in all 50 states.  That type of subtlety was left out of the more concise  regulatory language.  (42 CFR 422.101(b) 1,2,3, where 1 = NCDs, 2 = laws, 3 = written LCDs.)

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AI Corner

Here is a GPT4 summary and 10 takeaways.

The memorandum outlines new coverage criteria and utilization management requirements for Medicare Advantage (MA) plans, effective from January 1, 2024. It addresses questions on medical necessity determinations, the use of algorithms and AI in coverage decisions, public accessibility of internal coverage criteria, enforcement of new rules, and the impact on supplemental benefits. MA plans must align with Traditional Medicare's established coverage criteria, ensure transparency and non-discrimination in coverage determinations, and comply with specific requirements for prior authorization and utilization management to ensure beneficiaries' access to necessary care without undue delay.

1. Align with Traditional Medicare: MA plans must ensure their coverage criteria align with those of Traditional Medicare, particularly regarding medical necessity determinations.
2. Transparency in Coverage Criteria: Plans are required to make their internal coverage criteria publicly accessible, ensuring transparency.
3. Prior Authorization Reforms: The memo emphasizes the need for MA plans to streamline prior authorization processes to reduce delays in patient care.
4. Utilization Management Oversight: MA plans must annually review their utilization management tools, including algorithms and AI, to ensure they are evidence-based and not discriminatorily applied.
5. Non-Discrimination in Coverage Decisions: Plans must avoid using discriminatory practices in coverage decisions, ensuring equal access to necessary care for all beneficiaries.
6. Evidence-Based Decision Making: Coverage determinations should be based on the latest clinical evidence and guidelines.
7. Public Accessibility of Information: MA plans must provide easy access to information about coverage determinations and available appeals processes.
8. Annual Reporting Requirements: Plans are required to report their utilization management practices and outcomes to CMS, promoting accountability.
9. Impact on Supplemental Benefits: The memo clarifies how the new rules affect supplemental benefits, ensuring they complement but do not replace mandatory benefits.
10. Enforcement and Compliance: MA plans must be prepared for CMS oversight and enforcement of these new rules to ensure compliance.

These takeaways highlight the emphasis on transparency, evidence-based care, and non-discrimination, aiming to improve patient access and outcomes in the Medicare Advantage program.