Advocacy Correspondence: HAP Comment Letter to CMS, Changes to Medicare Advantage and Medicare Prescription Drug Benefit Program
February 13, 2023
The Honorable Chiquita Brooks-LaSure
Centers for Medicare & Medicaid Services
Department of Health and Human Services
Attention: CMS 4201-P
P.O. Box 8013
Baltimore, MD 21244-8013
Re: CMS 4201-P, Medicare Program; Contract Year 2024 Policy and Technical Changes to the Medicare Advantage and Medicare Prescription Drug Benefit Program
Dear Administrator Brooks-LaSure:
On behalf of 235 member hospitals, health systems, and other health care organizations, The Hospital and Healthsystem Association of Pennsylvania (HAP), is grateful for the opportunity to comment about the Centers for Medicare & Medicaid Services’ (CMS) proposed rule for policy and technical changes to the Medicare Advantage (MA) program in contract year 2024. Our members range from large academic medical centers in urban areas, to small critical access hospitals in rural Pennsylvania.
This proposed rule includes important protections for MA beneficiaries and clarifications for Medicare Advantage Organizations (MAO) that will improve how coverage works for enrollees, promote more timely access to care, strengthen access to behavioral health providers, help patients understand their Medicare coverage options, and reduce the administrative burden of health plan requirements on health care providers.
HAP strongly supports the proposed changes intended to strengthen consumer protections and oversight of MAOs, which are critical and urgently needed, and we encourage the agency to expeditiously finalize these important program updates.
We also offer our concerns about the proposed changes to the legal standard for identifying overpayments and recommend that CMS either withdraw this section of the proposed rule or restore the portions of prior CMS rulemaking on overpayments which afforded providers with the necessary time to investigate and accurately identify overpayments.
HAP members frequently encounter challenges in working with MAOs and securing timely authorization and payment for patient care, which can result in unnecessary delays and increased administrative burdens. These challenges often include misuse of utilization management programs, inappropriate denial of medically necessary services that would be covered by Traditional Medicare, requirements for unreasonable levels of documentation to demonstrate clinical appropriateness, inadequate provider networks to ensure patient access, and unilateral restrictions in health plan coverage in the middle of a contract year, among others.
As challenging as these issues are, often even more daunting is the process to attempt to resolve them with the MAOs. An inordinate amount of provider staff time must be spent on resubmitting information trying to figure out what else the MAO wants when everything required to meet industry-standard clinical criteria, such as InterQual or Milliman, has already been shared. Identifying and reaching the appropriate plan contact to speak with about concerns is difficult, and then getting a response from some MAOs requires significant provider persistence and time. MAOs determine when they have enough information to review a case, which is sometimes months after the first provider request for prior authorization was submitted. While all this back and forth goes on, patients are not getting the care they need.
In light of national health care workforce shortages, these barriers to care must be removed so the providers can spend less time on paperwork and more time with patients.
Additionally, these pain points will only get worse as enrollment in MAOs continues to increase rapidly; some estimates are predicting that during 2023, more than half of all Medicare beneficiaries are will be enrolled in an MAO. 1,2
HAP’s key comments and recommendations are included below and focus on prior authorization and medical necessity criteria; behavioral health access; post-acute care; oversight and enforcement; and our concerns regarding the proposed changes to the legal standard for identifying overpayments.
Prior Authorization and Medical Necessity Criteria
The MA program was intended to provide beneficiaries with coverage of an equivalent set of services to Traditional Medicare with a level of access that is no less favorable, but that aim is not consistently achieved. In fact, an April 2022 Department of Health and Human Services Office of the Inspector General (HHS-OIG) report found that 13 percent of MA prior authorization denials and 18 percent of MA payment denials that were reviewed met Medicare coverage rules and should have been granted. 3 As a result, HAP strongly supports CMS’ proposal to limit MAOs from adopting more restrictive rules than Traditional Medicare, seeking to ensure MAOs provide access to an equivalent set of covered services as intended.
Specifically, CMS proposes that plans can only create internal medical necessity criteria “when there is no applicable coverage criteria in Medicare statute, regulation, NCD [national coverage determination], or LCD [local coverage determination],” and that such criteria must be “based on current evidence in widely used treatment guidelines or clinical literature that is made publicly available to CMS, enrollees, and providers.” Eliminating MAO flexibility to apply differential and opaque criteria when determining medical necessity—which today are often inconsistent with Medicare coverage rules—would be significantly beneficial for patients. Despite existing CMS rules precluding MAOs from using clinical criteria that are more restrictive than Traditional Medicare, our members routinely experience MAOs doing exactly that. Currently, MAOs often classify their medical necessity criteria as proprietary and do not share specifics with us, resulting in a “black box” when our staff attempt to determine whether a service will be approved. This lack of transparency is a frequent reason that prior authorization and claim reimbursements are delayed or denied.
Hospital inpatient admission is one area in which plans often administer proprietary medical necessity criteria that is inconsistent with Medicare coverage rules. Inconsistent and more restrictive plan criteria for inpatient admissions frequently leads to uncertainty for providers and patients—whose medically justified inpatient stays are often denied or retrospectively downgraded to observation stays, even in situations where the clinical necessity for the admission far exceeds plan requirements.
Two examples of these downgrades to observation include patients who presented through the emergency department with the following symptoms:
- A 63-year-old male with hypokalemia, headache, nausea and vomiting, hypoxia, and COVID-19; admitted and treated as inpatient for 5 days.
- An 82-year-old female with syncope, hypoxia and COVID-19; admitted and treated as impatient for 5 days.
Both cases were downgraded to observation, and the provider continues to go back and forth with the MAO in an attempt to get paid appropriately for the medically necessary care that was rendered.
Such inappropriate denials of necessary inpatient coverage would be prohibited under CMS’ proposal, which explicitly reiterates that coverage of inpatient admissions, skilled nursing facility (SNF) care, home health services, and inpatient rehabilitation facilities (IRF) are basic Medicare benefits for which MAOs may not utilize proprietary medical necessity criteria. HAP urges CMS to finalize these important provisions codifying that MAOs must provide access to care for basic benefits in a way that is consistent with, and no more restrictive than, Traditional Medicare coverage rules.
Further Clarity to Support Understanding and Compliance
In the face of compelling evidence that certain MAOs have historically circumvented federal rules in applying overly restrictive medical necessity criteria, HAP recommends that CMS adopt more specific language regarding the Traditional Medicare rules that MAOs are required to follow. For example, we interpret that the reiteration of inpatient admissions as a basic benefit and the requirement that MAOs cover basic benefits in a fashion that is no more restrictive than Traditional Medicare means that MAOs must follow the Two-Midnight rule and adhere to the Inpatient Only List. This would effectively prevent MAOs from downgrading inpatient hospitals stays that exceed two midnights to observation status as raised in the preceding examples—a practice that effectively applies a more restrictive set of criteria to an inpatient admission. HAP urges CMS to explicitly state that MAOs must follow the Two-Midnight rule, for example, as opposed to leaving this to an interpretation of logic. Additionally, to enhance clarity and adherence, we encourage CMS to offer greater specificity and delineate the specific rules that MAOs must follow pursuant to Traditional Medicare coverage rules where possible.
Relevant Medical Expertise to Review Medical Necessity Determinations
HAP commends CMS’ proposed update to § 422.566(d), which seeks to ensure appropriate personnel make medical necessity determinations for MA beneficiaries. Our patients should be able to rely on the expert judgment of their medical care team as opposed to a health plan clinician who has never treated or even met the patient—and may not have the same training or specialty expertise as the treating physician. To ensure that denials are made based on relevant and applicable medical expertise, reviewing clinicians must have appropriate training in the field of medicine for the service being requested.
One area in which this is particularly important is peer-to-peer discussions. Hospital physicians frequently participate in MAO-required peer-to-peer discussions as part of the health plan appeals process during which our clinicians can explain the merits of their recommended treatment approach and advocate for its coverage. Our specialists often report that they encounter MAO medical professionals who do not have applicable expertise in the requested service discipline yet are responsible for conducting medical necessity reviews in that service area. Accordingly, HAP appreciates CMS’ recognition of this issue in proposing updates to the qualifications of the reviewing clinician and urges CMS to specify that these rules apply to peer-to-peer discussions in addition to prior authorization reviews. We also recommend CMS clarify that this provision applies to expedited reviews in addition to standard requests for prior authorization.
Site of Care Protections
HAP commends CMS for the inclusion of provisions designed to protect patients from unnecessary site of care restrictions. Specifically, CMS states multiple times in the preamble that when care could plausibly be provided “in more than one way or in more than one type of setting,” an MAO may not impose its choice of site of care and deny the request on those grounds if there is no basis for such restriction in Traditional Medicare. Protecting patients from inappropriate site of service restrictions is imperative, as such changes can impede patient access and delay care, especially when adopted mid-plan year or applied to critically ill or complex patient populations. To ensure that the regulations in effect create such protection, HAP encourages CMS to establish a more explicitly stated site of service limitation in the regulatory text (as opposed to the preamble) that directly prohibits MAOs from adopting policies which restrict the site(s) where a covered services can be delivered when there is no basis for that restriction in Traditional Medicare.
Continuity of Care
HAP recommends that CMS finalize its proposed patient protections for continuity of care. As proposed, CMS would require prior authorizations to be valid for the entirety of a prescribed treatment and require plans to honor existing prior authorizations for no less than 90 days of patient enrollment. This would preclude the need for additional prior authorizations for each episode of care in a series of prescribed treatments, such as a regimen of chemotherapy, which can delay or interrupt ongoing treatments unnecessarily. Regulations eliminating plan use of repetitive mid-treatment prior authorizations would benefit many, particularly vulnerable patients. As a result, HAP commends CMS for codifying these important patient protections to support continuity of care, and stresses the importance of finalizing these proposals.
Improving Access to Behavioral Health Services
HAP applauds CMS for its proposals to expand access to behavioral health services and strengthen MAO provider networks. Inadequate behavioral health provider networks have been a consistent problem for many years in Pennsylvania and nationwide, impeding access to critical services. As a result, our hospitals face very real challenges in supporting patients experiencing behavioral health crises who often spend extended periods of time in inappropriate settings (like the emergency department) waiting for an available bed or for MAO authorization to be transferred to another setting.
HAP specifically supports CMS’ proposal to add clinical psychologists, licensed clinical social workers, and prescribers of medication for opioid use disorder as specialty provider types for which there are specific minimum network standards, in addition to the current requirements to demonstrate adequate inclusion of psychiatry providers and inpatient psychiatric facilities. Behavioral health care services involve a wide continuum of providers, facilities and settings, all of which must be incorporated into insurance coverage to sufficiently meet specialized patient and community needs. In addition, by expanding the types of behavioral health specialty providers required to be in network beyond physician-level psychiatrists and inpatient psychiatric facilities, MAOs will have a wider array of qualified provider types to contract with in meeting requirements—and enrollees will have access to a broader selection of appropriately trained specialists.
Improving Access to Post-Acute Care Services
HAP commends CMS for the significant steps it has taken in this proposed rule to address concerns regarding MA beneficiary access to medically necessary post-acute care (PAC) services. Institutional PAC providers, including IRFs, long-term care hospitals (LTCH), SNFs, and home health agencies (HHA) play a vital role for recovering Medicare beneficiaries. These providers work to restore function and allow beneficiaries to return to their lives after a serious illness or injury, usually after an acute care hospitalization. However, MA beneficiaries are frequently denied access to these covered services or suffer long delays in receiving authorization for transfer to an appropriate PAC facility. This harms patients who are robbed of specialized rehabilitation care to optimize their chances of recovery, exacerbates capacity issues at general acute care hospitals, and saddles health care workers with time-consuming administrative appeals processes to get patients what they need.
In Pennsylvania, one MAO denies virtually every request for post-acute placement. In fact, providers have even submitted the exact same patient information to other MAOs in the state, and have gotten approvals for admission. However, this MAO continues to rely on its own criteria and processes to the detriment of its members.
Accordingly, CMS’ proposed modifications and additions will help ensure MAOs utilize proper criteria when evaluating requests for PAC services, that MAOs use prior authorization in an appropriate manner, and that the need for repeated prior authorization requests does not disrupt patient care and unduly burden providers. These updates are especially critical for PAC services, which the HHS-OIG report highlighted as one of the top service categories experiencing inappropriate denials for covered services. In addition, to shore up the protections proposed in this rule and to ensure the availability of appropriate PAC services in MAO networks, HAP recommends that CMS add a requirement that IRFs, LTCHs and HHAs be explicitly added to MA network adequacy requirements.
Enforcement and Oversight
Throughout this proposed rule, CMS has thoughtfully addressed a wide range of stakeholder concerns about MAO policies and practices which may delay or restrict access to care. As described above, we believe these policies will go a long way to protect MA beneficiaries, increase access to care and implement important guardrails needed to ensure the MA program functions as intended. However, CMS notes in several sections of the proposed rule that the provisions are restatements or codification of existing CMS policies or practices, which underscores the importance of the work ahead in the implementation phase to hold plans accountable and ensure compliance. We also recognize that many of these policies govern operational processes related to authorization, claims processing and payment, which are difficult to meaningfully oversee without rigorous oversight to include plan-level data collection and reporting, regular auditing, pathways for stakeholders to report suspected violations and penalties for non-compliance. Each of these elements will be critical in ensuring these important changes become standard operating procedures for MAOs and have the intended effects on beneficiary protection and access to care.
Changes to the Standard for Identifying Overpayments
CMS’ proposal to change the legal standard for identifying an overpayment (from the current standard of “reasonable diligence” to the False Claims Act definition of “knowingly”) would result in an unrealistic strict 60-day timeline to return overpayments once they have been identified. This new proposed timeline will be nearly impossible to meet, subjecting organizations to unnecessary False Claims Act liability even when they are acting in good faith to comply.
Although it is unclear exactly why CMS believes it is necessary to change its approach, the proposed rule incorrectly suggests that it is legally required to do so. The text and history of the relevant statutory provision (42 U.S.C. § 1320a-7k(d)(2)(A)) indicate that CMS must afford overpayment recipients with sufficient time to conduct audits and investigations to identify the size, scope, and nature of overpayments, so long as that overpayment recipient demonstrates good faith while working to identify the exact amount it must return to the Secretary.
There was good reason for Congress to adopt this approach. A 60-day timeframe for returning overpayments, without an appropriate period to investigate and quantify the overpayment, is entirely unrealistic. Once a potential overpayment is identified, compliance and revenue cycle teams conduct extensive and rigorous audit investigations to collect facts, identify the source of the discrepancy, mitigate any continuing circumstances if the issue is ongoing, and determine exactly how much money must be returned. This requires identifying every claim that may have been overpaid by claim number, dates of service, and amount billed and paid. It also may involve complex statistical sampling followed by quality checks, as well as consultations with the Medicare Administrative Contractor. Given the six-year lookback period, moreover, in many instances claims data is already archived or stored on legacy systems and must be “restored” such that it can be queried for the unique claims at hand. And, in some cases, identifying refunds involves applying different legal standards to different years of claims because Medicare rules change over time, further complicating the analysis and identification.
Previous CMS rulemaking on this topic, including the 2016 Final Rule on Reporting and Returning Overpayments, appropriately recognized these practical realities and clarified that up to six months is permitted to conduct a necessary investigation and appropriately quantify an overpayment. HHS should not deviate from this current practice and impose an unrealistically strict 60-day deadline on hospitals and health systems to return overpayments. Instead, once hospitals know of the existence of an overpayment, HHS should allow a reasonable timeframe for them to identify exactly how much they must repay before any 60-day clock is triggered. No judicial decision—and certainly no statute—requires any change in CMS’ existing approach. To that end, HAP strongly urges HHS to withdraw this portion of the proposed rule and/or restore the portions of the 2016 Final Rule that afford providers with the necessary time to investigate and accurately identify overpayments.
We thank you again for the opportunity to comment on these important topics. We particularly appreciate CMS’ thoughtful proposals to improve how the Medicare program works for patients and their providers and appreciate your consideration of our recommendations. HAP urges CMS to expeditiously finalize the health plan oversight and consumer protections included in the proposed rule and to adopt our recommended modifications to the proposed policy on overpayments.
Sincerely,
Jolene H. Calla, Esq.
HAP Vice President, Health Care Finance and Insurance
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1 https://www.medpac.gov/wp-content/uploads/2022/03/Mar22_MedPAC_ReportToCongress_Ch12_SEC.pdf
2 https://www.kff.org/medicare/issue-brief/medicare-advantage-in-2021-enrollment-update-and-key-trends/
3 https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf
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Topics: Federal Advocacy, Medicare
Revision Date: 2/13/2023
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