Complete Story


PIAC Annual Report

By Leslie Campbell, DPM

Private Insurance Advisory Committee Report
Leslie Campbell, DPM

Medicare Advantage:  Changes Effective in 2024 and New Proposed Rule
Kelli Back, JD, Law Offices of Kelli Back

In 2024, the source of primary insurance was comprised as follows:  Employer based – 48.7%; Individual (non-group) only – 6.4%; Medicaid – 21/2%; Medicare – 14.6%; Military – 1.3% and Uninsured – 8%.

The Medicare Advantage Market Snapshot demonstrated in 2023, that nearly 31 million Medicare beneficiaries are enrolled in a Medicare Advantage (MA) plan – representing 51% of the Medicare population with a projected increase to 6% by 2033.  Of the 31 million MA contracted individuals, 64% were in individual MA plans; 18% in employer sponsored MA plans and 19% enrolled in special needs MA plans.  UHC and Humana account for nearly half (47%) of all MA enrollees nationwide.

The average Medicare beneficiary had access to 43 MA plans in 2023 and this remains the same in 2024. However, this number has doubled since 2018.  The average Medicare beneficiary had access to 8 different organizations in 2024, one fewer than 2023.  4 new insurers entered the MA market in 2024, 3 of which were Special Needs Plans, while 14 firms exited the market in 2024 (due to low enrollment). Though HMOs currently account for 56% of MA plans nationwide in 2024, this number of the total share is declining with local PPO increasing their market share to 42% in 2024.  Humana and UHC are available in most counties with a 90% and 87% penetration respectively. Most major insurers are expanding into new counties, with CVS Health into the largest number of counties in 2024. 

THE 2024 FINAL RULE:  There are many significant changes pertaining to Utilization Management and Prior Authorization.

Background:  2022 OIG Study Findings

     A random sample of prior authorization and payment denials issued by 15 of the largest MAO (Medicare Advantage Organization) in 2019 (Yes, the OIG takes time to analyze the data), revealed that among these Denied Prior Authorization Requests, 13% met Medicare Coverage Rules and among Denied Claims, 18% met Medicare Coverage Rules and MAO Billing Rules. Given this information, the OIG made the following recommendations:

     OIG recommended that CMS:

  1. Issue new guidance on the appropriate use of MAO clinical criteria in medical necessity reviews
  2. Update its audit protocols to address the issues identified in this report, such as MAO use of clinical criteria and/or examining service types.
  3. Direct MAO to take steps to identify and address vulnerabilities that can lead to manual review errors and system errors.

Prior Authorization Requirements:  MAOs may only require prior authorization for one or more of the

following purposes:

  1. To confirm the presence of diagnoses or other medical criteria that are the basis for coverage determinations for the specific item or service,


  1. For benefits covered under par A or Part B, to ensure an item or service is medically necessary based on Medicare criteria or in the absence of such criteria, the MAO’s internal criteria, OR
  2. For supplemental benefits to ensure that the furnishing of a service of benefit is clinically appropriate.

Prior Authorization/Predetermination Requirements:

  1. If the MAO approves the furnishing a covered item or service through a prior authorization or pre-service determination of coverage or payment, it is prohibited from denying coverage later on the basis of lack of medical necessity.
  2. Under the new rule, a decision to deny a prior authorization or pre-determination request must be reviewed by a physician or other appropriate healthcare professional with a current and unrestricted US license and have “expertise in the file of medicine or health care that is appropriate for the services at issue”. The new rule also specifies that the reviewer need not be in the same specialty or subspecialty. 

Duration of Authorizations: 

Beginning in 2024, approval of a prior authorization request for a course of treatment for Part A.B benefits must be valid for as long as medically necessary.  Medical necessity determination is made in accordance with applicable coverage criteria, the individual patient’s medical history and the treating provider’s recommendation. 

*Beware:  CMS states in the preamble that an MAO may approve and authorize treatment for a different period than ordered by the provider if it determines the ordered period was not medically necessary or appropriate based on the enrollee’s diagnosis or condition.

New Authorization Transition Period: 

For a minimum of a 90-day period, the MAO cannot require re-authorization for an active course of treatment when an enrollee started a course of treatment before enrollment in the plan, even if the service is furnished by an out-of-network provider. 

In the preamble, CMS specified that an active course of treatment could include scheduled procedures, regardless of whether there are specific visits or activities scheduled leading up to the procedure.                      However, CMS states in the preamble that the new rule does not prevent concurrent or retrospective review of an active course of treatment if it does not interfere with the course of treatment.  It further notes that the plan can deny payment if applicable coverage criteria were not met but could not deny coverage on the basis that there was no prior authorization, or the service was furnished by an out-of-network provider. 

Use of Medicare Coverage Criteria

Under the new rule, MAOs must comply with NCDs, LCDs and general coverage and benefit conditions included in Traditional Medicare laws, unless superseded by laws applicable to MA plans.

Previous language said MAOs must comply with NCDs, LCDs and general coverage guidelines included in original Medicare manuals and instructions unless superseded by laws applicable to MA plans.

The new regulatory language specifies that this includes criteria for determining whether an item or service is a benefit available under Traditional Medicare. For example, this includes payment criteria for inpatient admissions (2 midnight rule), services, the inpatient only list, and requirements for payment of Skilled Nursing Facility (SNF) Care, Home Health Services under, and Inpatient Rehabilitation Facilities (IRF).

Use of Medicare Coverage Criteria

Where Medicare criteria exists that addresses the item or services and relevant circumstances, MAOs cannot apply additional criteria that could result in a denial. For example:

CMS states in the preamble that the provisions in FFS Medicare concerning who may deliver a service and in what setting it may be provided also apply to MAO coverage determinations.

Internal Coverage Criteria:

The new rules state that MAOs may create their own internal coverage criteria when Medicare coverage criteria are not fully established in statutes, regulations, NCDs or LCDs

CMS specifies in the new regulations that coverage criteria are not fully established if one of the following three criteria are met:

     (1) additional, unspecified criteria are needed to interpret or supplement general provisions in Medicare guidance in order to determine medical necessity consistently.

     (2) NCDs or LCDs include flexibility that explicitly allows for coverage in circumstances beyond the specific indications that are listed in an NCD or LCD; or

     (3) There is an absence of any applicable Medicare statutes, regulations, NCDs or LCDs setting forth coverage criteria.

According to the rule, internal coverage criteria must be based on current evidence in widely used treatment guidelines or clinical literature.

  1. Current, widely used treatment guidelines are those developed by organizations representing clinical medical specialties and refer to guidelines for the treatment of specific diseases or conditions. 
  2. Acceptable clinical literature includes large, randomized controlled trials or prospective cohort studies with clear results, published in a peer-reviewed journal, and specifically designed to answer the relevant clinical question, or large systematic reviews or meta-analyses summarizing the literature of the specific clinical question. While Milliman Care Guidelines and InterQual can’t be used where there is Medicare criteria, MCG and InterQual may be used where such Medicare criteria were not established if they meet the criteria for internal coverage guidelines.

Internal Coverage Criteria

If an MAO uses internal criteria, it must be publicly accessible and include a summary of evidence that was considered in developing the criteria along with a rationale for the criteria (for example, unspecified criteria are needed to interpret Medicare provisions on coverage of the particular item or service).

According to the preamble, “[T]his includes, when applicable, how the additional criteria interpret or supplement general provisions in Traditional Medicare and provide clinical benefits that are highly likely to outweigh any clinical harms, including from delayed or decreased access to items or services.”

CMS specifically declined to require specific mechanisms for how the information is made publicly available.

Medical Necessity Determinations:

In the new rule, CMS specifies that MAOs must make medical necessity determinations based on all of the following:

  1. Coverage and benefit criteria that complies with the regulations and may not deny coverage for Part A/B benefits based on coverage criteria not specified in the regulation.
  2. Whether the provision of items or services is reasonable and necessary under section 1862(a)(1) of the Social Security Act (which defines exclusions from Medicare).
  3. The enrollee's medical history (for example, diagnoses, conditions, functional status), physician recommendations, and clinical notes.
  4. Where appropriate, involvement of the organization's medical director who is responsible for ensuring the clinical accuracy of all organization determinations and reconsiderations involving medical necessity.

CMS stated in the preamble that MAOs “must ensure that they are making medical necessity determinations based on the circumstances of the specific individual, … as opposed to using an algorithm or software that doesn’t account for an individual’s circumstances.”

Utilization Management Committee

To ensure prior authorization policies and utilization management procedures are consistent with applicable requirements, the new rules require MAOs to have a Utilization Management Committee. The Committee must review all utilization management policies, including prior authorization policies, prior to their use and then annually. 

  1. For items and services addressed by Medicare coverage guidelines, they must ensure the policies are consistent current FFS Medicare’s national and local coverage decisions and Medicare law.
  2. For any internal coverage criteria, they must ensure they meet the standard set forth in the regulations.
  3. The Utilization Management Committee must also review the services to which the MAO’s utilization management processes apply.

Document in writing the reason for its decisions regarding the development of UM policies and make this documentation available to CMS upon request.

Composition of Utilization Management Committee

  1. The Utilization Management Committee must be chaired by the organization’s medical director. The majority of members must be practicing physicians.
  2. At least one practicing physician must be independent and free of conflict with the MA organization.
  3. The committee must include at least one practicing physician who is an expert in geriatrics or care of disabled individuals.
  4. Other members must represent various clinical specialties, such as primary care and behavioral health to ensure adequate consideration of a range of conditions in the developing utilization management policies.

Focus of the UM and PA Provisions:

“Our focus of this policy is not on how or how much MA organizations pay their contracted providers, but on ensuring that MA enrollees receive items and services for which benefits are available under Part A and Part B (excluding hospice care and organ acquisitions for kidney transplants) that they would receive under Traditional Medicare.” Preamble to the 2024 Rule

The Rule Does Not Override Contractual Provisions with MAOs

Some commenters to the final rule requested that CMS require MAOs to adhere to FFS Medicare coding policies related to how they pay providers or to require MAOs to only use CMS software and billing processes. CMS reminded the commenters that the agency is prohibited by statute from requiring pricing structures to be paid by MAOs. However, CMS noted that:

     “while MA organizations can develop their own payment methodologies for in-network providers for different diagnoses or procedure codes, national standard code sets for ICD–10 codes and CPT/HCPCS codes, along with respective coding guidelines, as required under HIPAA, must be followed. In this sense, the code sets and associated coding guidelines used in Traditional Medicare are the same as those required to be used by MA organizations.”

Affirmation of Non-Interference Regulation

In the preamble, CMS states more than once that the agency affirms MA organizations’ rights to contract with providers of their choosing and to set the price structures, including how and how much contracted providers are paid.

Section 1854(s)(6)(b)(iii) of the social Security Act, known as the “non-interference clause” states “the Secretary may not require any MA organization to contract with a particular hospital, physician, or other entity or individual to furnish items and services under this title or require a particular price structure for payment under such a contract to the extent consistent with the Secretary’s authority under this part.”

Other Provisions of the Regulation – Marketing

Focus on Third Party Marketing Organizations (TPMOs)

  1. CMS required increase oversight of TPMOs by MAOs.
  2. Enhanced the disclaimer language that TPMOs must use when talking to beneficiaries. Required greater clarity about benefits, savings and where marketing pieces are coming from. Cracked down on misleading use of term “Medicare.” Narrowed the obligation to record all calls with beneficiaries to just marketing and enrollment calls.

Other Provisions of the Regulation:

Requirement to assess and enhance digital literacy to allow beneficiaries to avail themselves or remote technologies. Enhanced MAO obligations around notifying beneficiaries of termination of providers with or without cause. Allows CMS to extrapolate risk adjustment data validation audit findings beginning with payment year 2018.

Proposed Rule for 2025

Recently put on display, scheduled to be published November 15th. Much narrower in scope. Only UM change is a focus on health equity – measuring impact of UM policies on low income and disabled enrollees. Mid-year notice regarding supplemental benefits – to avoid beneficiaries purchasing and not using such benefits New rules around Special Supplemental Benefits for the Chronically Ill Big change in broker agent payment – Sets a single rate for all plans that includes administrative services. Intended to avoid payment arrangements that incentivize enrollment in plans that might not meet beneficiary needs.

Why We Need a -25 Modifier Workgroup!!!!

         Mark, Block, DPM

The Challenge

It is the purview of this Workgroup to review and update the APMA -25 Modifier Toolkit

The Assignment

     Compose vignettes to the current available information.

The Process

  1. Schedule virtual meeting with:

Committee chair of -25 modifier subcommittee, the Coding Committee and Health Policy and Practice Chairs, APMA Staff and Selected Volunteers

Delegate specific assignments.

  1. Review work progress.
  2. Edit and finalize submissions.


     During our recent call, an open discussion with principles took place. Additional modification to submitted material prior to finalization was discussed. Several aspects were debated to determine the most appropriate way to convey the message, eliminate confusion and provide additional suggestions for future endeavors.

Conclusion:  Prospectively, it is anticipated that the workgroup will continue to deal with future carrier challenges.  If significant recoupment occurs, likely, this will validate and motivate payors to further scrutinize and ramp up initiatives.  The Workgroup will assist providers with a better understanding of the appropriate use of the -25 modifier.  Hopefully, this will decrease denials and result in less frequent targeted reviews.   

Takeaway:  This project is an ongoing endeavor, with the intent that APMA will continue to monitor the (“25”) modifier issue.  As significant issues arise and/or corrective actions appear to be warranted, the APMA resources/toolkit will be updated on an as needed basis. Members are encouraged to stay updated on updated information provided on the APMA website:

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