2024 Oversight Activities – Utilization Management Changes

November 20, 2023

CMS notified Medicare Advantage Organizations (MAOs) on October 24, 2023, that it will be conducting strategic conversations on the new Utilization Management (UM) requirements effective January 1, 2024. Following these conversations, CMS will start conducting routine and focused audits of the new prior authorization and related rules published in April of this year in the final rule, CMS-4201-F, Medicare Program; Contract Year 2024 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly.

Have you taken advantage of the strategic conversations with your Account Managers? CODY Consulting is here to help you make sense of it all and implement the necessary changes. We can perform reviews of your existing policies and procedures to ensure they address the requirements, draft updates, develop staff training materials, and perform staff training.

The 2024 Final Rule includes many important updates to the UM program administered by MAOs. These include, but are not limited to the following provisions:

Prior Authorization Criteria
- Prior authorization may only be used to confirm the presence of diagnoses or other medical criteria and/or ensure that an item or service is medically necessary.
- MAOs must comply with national coverage determinations (NCD), local coverage determinations (LCD), and Traditional Medicare general coverage and benefit conditions.
- If coverage criteria are not fully established in Medicare statute, regulation, NCD, or LCD, or is required for supplemental benefits, MAOs may create publicly accessible internal coverage criteria that are based on current evidence in widely used treatment guidelines or clinical literature.
  - When other criteria are used, MAOs must demonstrate that the additional criteria provide clinical benefits that are highly likely to outweigh any clinical harms, including from delayed or decreased access to items or services.
- Organization determinations must be reviewed by a physician or other appropriate health care professional with expertise in the field of medicine or health care that is appropriate for the services at issue when the MAO expects to issue a partially or fully adverse decision.
- If the MAO approved the service through an advance determination of coverage, it may not deny coverage later on the basis of a lack of medical necessity. This means that when an enrollee or provider requests a pre-service determination and the MAO approves this pre-service determination of coverage, the MAO cannot later deny coverage or payment of this approval based on medical necessity.
Transition Period
- MAOs must grant a minimum 90-day transition period when an enrollee who is currently undergoing an active course of treatment switches to a new MAO. This includes members who are new to Medicare.
- An approval granted through prior authorization processes must be valid for as long as medically necessary to avoid disruptions in care in accordance with applicable coverage criteria, the patient’s medical history, and the treating provider’s recommendation.
Utilization Management Committee
- MAOs must establish a Utilization Management Committee to review all utilization management policies annually and ensure they are consistent with the coverage requirements, including current, Traditional Medicare’s national and local coverage decisions and guidelines.

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