Medicare Prior Authorization Program – Ten Things to Know

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Original story posted on: June 30, 2020

Today is the first day that prior authorization is required for Medicare beneficiaries to undergo specific surgeries. Here are the 10 things you need to know about the program.

  • Five types of surgery – blepharoplasty, botulinum toxin injections to the face, panniculectomy, rhinoplasty, and vein ablation – performed on traditional Medicare beneficiaries at hospital outpatient departments will require prior authorization as of July 1, 2020. The applicable HCPCS codes can be found here.
  • It is the duty of the hospital to obtain prior authorization even though the physician determines medical necessity and scheduling, and performs the procedure. Physicians may assist in the process or perform the entire process, but the onus is on the hospital to ensure it is properly completed prior to the performance of the procedure.
  • Each Medicare Administrative Contractor (MAC) will publish its own medical necessity requirements for each procedure, either through a local coverage determination or guidelines published on their website, or will use specialty guidelines and established standards of care. There are currently no national coverage determinations for any of these procedures. Health systems and physicians that operate in multiple regions should take great care to ensure they are referencing the correct guidelines, as regional differences could be significant.
  • If the MAC determines that medical necessity is met, it will issue an affirming decision and provide a Unique Tracking Number (UTN) that must be placed on the hospital claim(s). The UTN does not need to be placed on any physician claims.
  • Prior authorization is a condition of payment under 42 CFR 419.80(b). If an affirming decision is not obtained, or a procedure is performed without this affirming decision, the claim will be denied. The hospital may then appeal the denial, and if medical necessity is established, the claim will be paid.
  • A denial of a hospital claim will also result in all associated claims being denied, including that of the surgeon, anesthesiologist, radiologist, pathologist, and any other provider who submits claims. These claims will be denied either pre- or post-payment, depending on the MAC’s processes.
  • Each provider will be required to appeal its denial separately. A successful appeal by the hospital or surgeon will not result in an overturn of the denial for the claims of any other providers. Each provider will be responsible for obtaining the medical records to support medical necessity and submitting them with their appeal.
  • The MACs will have 10 business days to complete their review and issue an affirming or non-affirming decision. Providers may request an expedited two-business day review if a delay would endanger the health or life of the beneficiary, or his or her ability to regain maximum function. The MACs are not obligated to perform an expedited review if they feel the request is unreasonable.
  • If the MAC issues a non-affirming decision, the provider may resubmit information as many times as necessary to meet the medical necessity requirements. A provider at any point may accept the non-affirming decision, and has the option to issue an Advance Beneficiary Notice (ABN) to the patient (using the -GA modifier on the claim), or perform the procedure without the affirming decision or ABN, knowing it will automatically deny, at which point they may appeal.
  • The MACs are permitted to develop cover sheets or checklists for providers to aid in the submission of requests, but their use is not mandatory. Providers may develop their own processes for collecting and submitting the required documentation. Photographs are required for many procedures, so ensuring there is a way to transmit them with adequate resolution is important.
Ronald Hirsch, MD

Ronald Hirsch, MD, FACP, CHCQM-PHYADV, CHRI, FABQAURP is vice president of the Regulations and Education Group at R1 Physician Advisory Services. Dr. Hirsch’s career in medicine includes many clinical leadership roles at healthcare organizations ranging from acute-care hospitals and home health agencies to long-term care facilities and group medical practices. In addition to serving as a medical director of case management and medical necessity reviewer throughout his career, Dr. Hirsch has delivered numerous peer lectures on case management best practices and is a published author on the topic. He is a member of the Advisory Board of the American College of Physician Advisors, a member of the American Case Management Association, and a Fellow of the American College of Physicians. Dr. Hirsch is a member of the RACmonitor editorial board and is regular panelist on Monitor Mondays.

The opinions expressed are those of the author and do not necessarily reflect the views, policies, or opinions of R1 RCM, Inc. or R1 Physician Advisory Services (R1 PAS).

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