Most commonly, higher cost services, such as chemotherapy or skilled nursing facility stays, require prior authorization. However, virtually all Medicare Advantage enrollees (99%) were enrolled in a plan that required prior authorization for some services in 2022. That is still the case for beneficiaries enrolled in traditional Medicare, who are only required to obtain prior authorization for a limited set of services. Historically, Medicare beneficiaries were rarely required to receive prior authorization. In the fall of 2022, the House of Representatives passed bi-partisan legislation that would require Medicare Advantage insurers to establish an electronic process for real-time prior authorization determinations, but it did not pass the Senate and become law. The second proposed rule clarifies the criteria that may be used by Medicare Advantage plans in establishing prior authorization policies and the duration for which a prior authorization is valid. The provisions in the first proposed rule are intended to improve the use of electronic prior authorization processes, as well as the timeliness and transparency of decisions, and apply to Medicare Advantage and certain other insurers. In response to these concerns, the Centers for Medicare and Medicaid Services (CMS) published two proposed rules in December 2022 that include provisions related to prior authorization requirements (among other policy changes). While prior authorization has long been used as a tool to contain spending and prevent people from receiving unnecessary or low-value services, there are some concerns that current prior authorization requirements and processes may create barriers and delays to receiving necessary care, as well as exacerbate complexity for patients and their providers. Prior authorization is intended to ensure that health care services are medically necessary by requiring providers to obtain approval before a service or other benefit will be covered by a patient’s insurance.
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