On June 12, 2024, the Center for Medicaid and CHIP Services (CMCS) issued an Informational Bulletin (CIB) to provide additional tools for States and the Centers for Medicare & Medicaid Services (CMS) to improve the monitoring and oversight of managed care in Medicaid and the Children’s Health Insurance Program (CHIP). The CIB referred to the July 17, 2023, report issued by the Office of the Inspector General (OIG) titled ‘High Rates of Prior Authorization Denials by Some Health Plans and Limited State Oversight Raise Concerns About Access to Care in Medicaid Managed Care’ and the Interoperability and Patient Access final rule published to the Federal Register on February 8, 2024. The CIB further reminds States of oversight requirements in this area and their expectation that the oversight is robust and comprehensive to address concerns identified by the recent OIG findings. 

The OIG report issued in July 2023 highlights that overall Medicaid managed care organizations (MCOs) denied one out of every eight (12.5%) prior authorization requests in 2019. Medicare Advantage health plans denied only 5.7% in 2019. Among the 115 MCOs in the OIG review, 12 had prior authorization denials greater than 25%, which is twice the average across the 115 MCOs. 

Timeline of Key Provisions

The Interoperability and Patient Access final rule (CMS-0057-F) includes several provisions that impact Medicaid and CHIP managed care plans. The timeline of the key provisions in the final rule related to prior authorization is as follows.

• For rating periods starting on or after January 1, 2026 managed care plans must:
• Provide standard prior authorization decisions within state-established timeframes that cannot exceed 7 calendar days for non-expedited matters. This is a reduction from the current requirement of 14 calendar days. The timeframe for expedited matters remains the same at 72 hours.
• Provide a specific reason for every denial to the provider.
• Post annual prior authorization metrics on their public website including the number of requests approved, denied, approved after appeal, and the average time between submission and decision.
• For rating periods starting on or after January 1, 2027 managed care plans must have a Prior Authorization Application Programming Interface (API) that will:
• Identify all services that require prior authorization.
• Specify the documentation requirements for each service.
• Enable prior authorization requests and responses to be exchanged.

CMCS also identified CMS is updating the fields required by the Managed Care Program Annual Report (MCPAR) to collect data related to the prior authorization requirements.

How We Can Help Our State Clients

Many of these requirements that are new with respect to Medicaid MCOs are very similar to requirements that have been in place within the CMS Medicare Manuals, specifically the Parts C & D Enrollee Grievances, Organization/Coverage Determinations, and Appeals Guidance. Myers and Stauffer is uniquely positioned to assist States with these new requirements as we not only work with many States to assist in providing oversight of MCO operations, but we have also worked extensively with CMS for more than 10 years to both develop and apply the protocols outlined in the Medicare Manuals, including those related to prior authorization.

Following are high-risk areas for which Myers and Stauffer can provide audit and consulting procedures, including:

• Required reporting of prior authorizations — Our team incorporates reports of prior authorization decisions into the managed care contract language or amendment language. We also track and dashboard reports submitted by managed care entities to identify trends and potential areas of non-compliance or concern.
• Untimely processing of requests for prior authorizations of services/drugs or requests for appeals — We identify and correct inherent access-to-care issues that may be caused by the untimely processing of requests for prior authorizations of services/drugs or requests for appeals.
• Inappropriate denials of services or drug requests (prior authorization requests, services on appeal) — We identify and correct inherent access-to-care or access-to-medication issues that may be caused by an inappropriate clinical decision as determined through our onboard licensed clinicians’ reviews. Myers and Stauffer has experienced physicians, nurses, pharmacists and auditors with decade-long experience in evaluating clinical decision making.
• Inappropriate denials of payments for covered services and drugs — Our team identifies and corrects questionable determinations related to denials of provider payments and member reimbursement requests.
• Unidentified or unprocessed prior authorization requests and requests for appeals, requests for drugs or complaints/grievances — We identify and correct instances of unrecognized or unprocessed prior authorization requests and appeals, requests for drugs or complaints/grievances. These issues often relate to significant access-to-care concerns.

Myers and Stauffer can develop an approach alongside your state to ensure the identified risk areas are addressed, including but not limited to, departmental input, data analytics, risk assessments, and judgmental sampling supported by our clinical team.

While external quality review organizations (EQROs) may review some of the areas listed above to determine compliance with the MCOs’ contractually mandated policies and procedures, the reviews do not typically assess their effectiveness, nor do they provide a root-cause analysis to help identify the issues contributing to their non-compliance. Furthermore, as the OIG reported, states may not be currently collecting the appropriate amount of data necessary to monitor prior authorization denials. Through our partnership with CMS, our ability to design compliance programs of all levels that address issues similar to those described by the OIG, and our experience performing engagements for the Medicare Advantage program that include extensive analyses and reviews of prior authorization denials, we are well equipped to apply this knowledge and to help improve all states’ oversight of its Medicaid managed care programs.

If you would like more information about how Myers and Stauffer can support your State’s monitoring and reporting of MCOs’ prior authorization denials, please contact one of our contributors listed below.