What would the start of summer be without a flurry of policy updates from the Centers for Medicare & Medicaid Services (CMS) and commercial payers? To be fair, given how often policy changes negatively impact rehab therapists, most would say better and more enjoyable.

So it comes as a bit of a surprise that the 2024 final rule for Medicare Parts C (Medicare Advantage) and D, with new policies, should make positive changes to coverage standards as well as prior authorization regulations and usage management.

Not to be outdone, some of the biggest players in commercial insurance have made some announcements about changes to their prior authorization process. So, how will these new rules affect rehab therapists? What Physical Therapy Payer Updates Do You Need to Know? Let’s dive in to find out more.

Medicare Advantage’s prior authorization requirements are shrinking.

Sure to be a welcome development for clinicians everywhere, the final rule is to use prior authorization to avoid unnecessary interruptions in care. Under the new guidelines, Medicare Advantage (MA) plans can only use prior authorization to confirm the existence of a diagnosis, as the basis for a coverage determination, or to ensure that physical therapy services (or any other type of treatment) are medically necessary.

The 2024 final rule also introduces a requirement that a request for prior authorization to approve a course of treatment be in effect as long as it is medically necessary, taking into account the coverage criteria, the patient’s medical history, and the patient’s clinician’s recommendation. Through this With the change, CMS hopes to get rid of the requirement for clinicians to obtain prior authorization again after three visits. MA plans are also prohibited from revising their decisions after the fact due to lack of medical necessity, with rare exceptions, and cannot adopt a one-course blanket policy.

To achieve this goal of better continuity of care, the final rule establishes a policy that MA plan participants who switch plans have a 90-day period during which no further prior authorization is required for an active course of treatment. This will ensure patients are not forgoing their care just because they switch to a different insurance.

Coverage standards for Medicare Advantage plans will be more in line with Medicare policies.

The first big news is that CMS is developing a medical necessity determination policy that is closer to established Medicare guidelines. We should first note that these changes apply strictly to coverage and the stated rules do not affect any PT or OT rules under Medicare Part B.

So what changes? Under the 2024 final rule, MA plan providers cannot have coverage standards that are more stringent than those mandated by Medicare, or at least as far as Medicare has issued guidance. This means the following situations:

• Additional criteria are required to interpret terms;
• Local Coverage Determination (LCD) or National Coverage Determination (NCD) allow for flexibility; or
• No Medicare insurance policy applies.

In the absence of fully developed health insurance policies, any internal standards developed by payers must be based on widely used treatment guidelines or clinical literature.

Payer will have usage management committee.

To ensure compliance with the new prior authorization provisions and existing MA policies, payers will need to have a usage management committee to oversee account management activities and track and report complaints and audit their programs (in addition to audits conducted by CMS). The Access Management Committee will be headed by the program’s Medical Director and most members will be licensed physicians. The committees were also authorized to have representation across clinical specialties, including a geriatric/disability specialist as well as an independent member without any conflict of interest.

These new committees will be required to annually review and approve the usage management policy and document in writing the reasons behind any decisions made during the usage management policy development process. Beginning January 1, 2024, the MA program will not be able to implement any policy that has not been reviewed or approved by the Utilization Management Committee.

Any potential denial of coverage needs to be reviewed first.

Another major shift is a change to the coverage denial process for the MA plan. Under the new rules, any potential prior authorization denial must first be reviewed by a clinician in that specialty. In the case of PTs and OTs, this means that any prior authorization refusal to the patient first needs to be signed off by another physical therapist or occupational therapist, not a nurse or other provider in an unrelated discipline. Currently, this review procedure applies only to appeals against prior authorization denials.

Insurers are getting ahead of the prior authorization curve.

We know that private payers tend to take their cues from CMS when it comes to policy changes, and the new prior authorization provision is no exception. United Healthcare has announced plans to eliminate the 20% pre-authorization beginning in the third quarter of 2023. Similarly, Cigna announced that it would eliminate pre-authorization for approximately 500 services and devices, while Aetna said it would focus on electronic pre-authorization to reduce the number and burden of prior authorization requests.

It’s not all good news on this front, though. While Cigna may be reducing prior authorization for certain services, they are also doubling down on outsourcing benefits administration to third-party contractors. As described in this article by APTA, American Specialty Health will expand to 15 additional states this fall. Affected providers should be notified of the change, APTA notes, but you can check out this post for a full list of states and organizations that will be affected and a timeframe for the rollout.

The state legislature is seeking to reform the practice of prior authorization.

Lest you think insurance companies have somehow discovered the error of their own ways, we should note that private payers don’t seem to have much choice in crafting their prior authorization provisions. In addition to the MA plan and new rules for Part D, the AMA reported in early May that the legislative session will consider more than 90 preauthorization bills in 30 states. Although the changes implemented by CMS are limited to the MA program, a number of bills passing through the state legislature are seeking substantial changes to the previous authorization process across the board.

Some of the proposed regulations outlined in the AMA article are consistent with upcoming changes at the MA, such as adverse decisions from clinicians in the same specialty and a 90-day transition period for prior authorization of existing patient switching programs. Others have more ambitious goals, such as proposing to shorten prior authorization approval times to 48 hours for non-urgent care and 24 hours for emergency treatment, or to make prior authorization valid for a year regardless of dose changes. While it remains to be seen how many will actually become law, prior authorization does seem to be one of the few things Americans (and politicians) can agree to these days.

With these changes to the pre-authorization regulations going into effect, clinicians should see a significant reduction in their administrative burden — at least for their Medicare Advantage patients. The only hope is that this is just the beginning of reducing prior authorization requirements across the board to manageable levels.