CMS finalizes changes to Medicare Advantage star ratings, prior authorization reforms

By Robert King / April 5, 2023

A new final rule installs new requirements for Medicare Advantage plans to require prior authorization, such as ensuring a transition period when a beneficiary switches plans. 

The Centers for Medicare & Medicaid Services released the final 2024 MA and Part D rule that introduces key policy changes. In addition to prior authorization, the rule includes changes for star ratings as well as provider directory and marketing reforms. 

“With this final rule, CMS is putting in place new safeguards that make it easier for people with Medicare to access the benefits and services they are entitled to,” said CMS Administrator Chiquita Brooks-LaSure in a statement.

One of the key changes applies to the prior authorization tool insurers use to require providers to get approval before offering a certain service or drug. 

The rule includes new continuity of care requirements that says coordinated care plans can only use prior authorization “to confirm the presence of diagnoses or other medical criteria and/or ensure that an item or service is medically necessary,” according to a fact sheet. 

“MA plans cannot add additional hoops to go through before an enrollee can access to care they are entitled to under Medicare,” said Center for Medicare Director Meena Seshmani during a call with reporters.

Coordinated care plans also have to offer a minimum 90-day transition period if an enrollee under treatment switches to a new MA plan. The new plan must not require prior authorization for the course of treatment.

CMS sought to address concerns surrounding what the term “course of treatment” meant in the proposed rule. The agency said that the rule requires approval of a prior authorization request for a course of treatment that must be valid for as long as it is medically necessary to ensure there is no disruption in care and is recommended by the beneficiary’s provider. 

An MA plan must also make sure to follow any national or local coverage determinations. If there is no determination in place, then an MA plan can create its own coverage criteria but must stand up a committee to annually review such guidelines.

The rule is the latest effort by CMS to address prior authorization in MA. The agency also finalized a rule that requires plans to install electronic prior authorization by 2026. 

In addition to the prior authorization requirements, the latest MA and Part D rule finalizes several steps to crack down on misleading marketing practices. 

CMS has prohibited ads that don’t mention a specific plan name as well as any ads that could use “words and imagery that may confuse beneficiaries or use language or Medicare logos in a way that is misleading, confusing or misrepresents the plan,” the agency said. 

The prohibition comes after some progressive lawmakers have introduced legislation to rename Medicare Advantage over concerns it could confuse seniors. 

CMS also finalized new changes to strengthen plans’ role in monitoring agent and broker activity but did not finalize a proposal to change how brokers and agents share information with a  third party. 

“This is something we continue to explore,” said Seshmani without elaborating further.

The agency also finalized key changes to the star rating system, most notably the introduction of a health equity index in 2027 that will gauge how plans fare in improving social risk factors for beneficiaries.