Medicare to require prior authorization for certain outpatient department services starting July 1, 2020

In the Calendar Year 2020 Outpatient Prospective Payment System/Ambulatory Surgical Center Final Rule (2020 OPPS Final Rule), the Centers for Medicare and Medicaid Services (CMS) established a prior authorization process and requirements for certain hospital outpatient department (OPD) services in order to help control unnecessary increases in the volume of these services.

According to CMS, this prior authorization process for certain hospital OPD services “will ensure that Medicare beneficiaries continue to receive medically necessary care – while protecting the Medicare Trust Fund from improper payments and, at the same time, keeping the medical necessity documentation requirements unchanged for providers.”

Effective for dates of service on or after July 1, 2020, the following hospital OPD services will require prior authorization:

• Blepharoplasty
• Botulinum toxin injections
• Panniculectomy
• Rhinoplasty
• Vein ablation

The complete list of HCPCS codes for which prior authorization is required is posted on the CMS website. The initial list of OPD services requiring prior authorization was developed by CMS because, according to CMS, these services “represent procedures that are likely to be cosmetic surgical procedures and/or are directly related to cosmetic surgical procedures that are not covered by Medicare, but may be combined with or masquerading as therapeutic services.” In addition to the denial for the listed services if prior authorization is not obtained, CMS also explained in the 2020 OPPS Final Rule that that “any claims associated with or related to a service…for which a claim denial is issued will be denied as well since these services would be unnecessary if the service…had not been provided. These associated services include, but are not limited to, services such as anesthesiology services, physician services, and/or facility services.” To assist hospitals in complying with the new prior authorization process, CMS has published Frequently Asked Questions.

There is no specific form to request prior authorization. Medicare Administrative Contractors (MACs) may make a cover sheet or other templates available for voluntary use, but as of the date of this article, the Ohio MAC, CGS Administrators, has not done so. Prior authorization requests for dates of services beginning July 1, 2020, will be accepted by MACs starting June 17, 2020. The standard review timeframe is ten business days from the date the prior authorization request is received. If waiting that long for a decision could seriously jeopardize the life or health of the beneficiary, a provider can request an expedited review timeframe of two business days.

MACs may render three possible decisions in response to a request for prior authorization:

• Provisional affirmation decision – a preliminary finding that a future claim submitted to Medicare for the item or service likely meets Medicare’s coverage, coding and payment requirements.
• Non-affirmation decision – a preliminary finding that if a future claim is submitted for the item or service, it does not meet Medicare’s coverage, coding and payment requirements.
• Provisional partial affirmation decision – means that one or more service(s) on the request received a provisional affirmation decision and one or more service(s) received a non-affirmation decision.

The MAC will send a written decision and, if applicable, provide detailed reasons for the non-affirmation decision. The MAC will also share such information with beneficiaries. If a request for prior authorization is not affirmed, providers should consider if there is additional documentation that could address the non-affirmation decision upon resubmission of the prior authorization request. Providers may also request additional information or clarification from their MAC. There is no appeal process for non-affirmation decisions; however, if a claim is submitted with a non-affirmation decision, and is subsequently denied, that is considered an initial determination and is appealable. 

MACs will list the prior authorization unique tracking number (UTN) on the decision notice. The UTN must be submitted on the claim in order to receive payment. Claims for services for which prior authorization is required that do not include the UTN will be denied.

In response to concerns expressed by some commenters that even when a provisional affirmation decision is obtained, the claim could ultimately be denied, CMS stated that “having a provisional affirmation shows that a claim likely meets Medicare’s coverage and payment rules and is likely to be paid. Absent evidence of fraud or gaming, a provider can anticipate payment as long as other payment requirements are met. We anticipate that most, if not all, claims for which a provisional affirmation is obtained would not be denied on the basis of medical necessity. However, it is possible the claim could be denied because it did not meet a coding or billing requirement (examples include, but are not limited to, when there are duplicate claims submitted, when some element of the claim form is incorrectly completed, or if a modifier is placed on a claim that prevents it from processing appropriately).”

Hospitals should ensure that they have processes in place to request prior authorization from their MACs for the listed OPD services prior to July 1, 2020, in order to avoid denials.