More Prior Authorization? Say It Ain’t So – and More

As I am sure you all recall, a month ago, RACmonitor eNews broke the story of the new Aetna policy that will pay inpatient admissions at the observation rate if MCG inpatient criteria are not met.

Now, I wish I could report that Aetna has rescinded the change, but that has not happened yet. But I can tell you the uproar is loud and sustained. I know many of you have taken action, and we are also seeing state and federal organizations acting to stop the implementation. The effective date is Nov. 15, so there is still time for Aetna to back off.

And of course, Cigna has jumped on the bandwagon with a policy to automatically downgrade physician claims for high-level visits without even reviewing the medical record. Now, that is probably even more egregious than Aetna’s plan, as the visit level is determined by medical decision-making that cannot possibly be determined without reviewing the actual physician notes. But violating rules has never stopped a payor before…

Moving on, I occasionally get questions from case managers who question the legality or morality of new policies that are being implemented at their institution. And I am always happy to provide them with my perspective. Well, one recent one made my jaw drop. This hospital’s leadership developed their own notice of non-coverage and financial liability form, and they instructed their staff to give it out to any patient staying in the hospital who is stable.

But they are instructed to give it to every patient, regardless of payer and regardless of the reason they are staying. For example, if a patient comes in on Saturday with chest pain and needs a stress test that won’t be done until Monday, they get the notice on Sunday that if they stay to await the test, they are financially responsible for one day in the hospital.

Well, as you could guess, I had a lot to say. First, clearly a hospital-developed form is not appropriate for Medicare patients. And it wasn’t clear that they confirmed with all other payors that they could shift financial liability to patients. They are just doing it.

But most significantly, they are going to hold the patient financially liable for issues that are completely outside their control. It’s one thing to give a notice to the patient who wants to stay another night because they have had digestive issues, or doesn’t want to go home when it is dark outside, but this is not that. I know hospitals are overflowing, and we have discussed the danger of ED boarding, and of course, the financial situation for many facilities is dire, but this is outrageous. Where was compliance and ethics when this policy was adopted? Please, if you hear this being discussed at your facility, just say no.

Next, we all know nobody likes doing prior authorization, and the Centers for Medicare & Medicaid Services (CMS) has promised to fix the problem. Well, CMS just made it worse, by adding a new prior authorization program for ambulatory surgery centers (ASCs) in 10 very populous states – California, Florida, Texas, Arizona, Ohio, Tennessee, Pennsylvania, Maryland, Georgia, and New York – for five categories of procedures, including blepharoplasty, botulinum toxin injections, panniculectomy, rhinoplasty, and vein ablation. This will start Dec. 15.

This demonstration project, unlike the recently announced Wasteful and Inappropriate Services Reduction (WISeR) program, will use the traditional method of prior authorization, with the ASC sending medical records to the Medicare Administrative Contractor (MAC) and the MAC reviewing for medical necessity and issuing a unique tracking number if approved.

As a reminder, the WISeR program will have so-far unidentified contractors using artificial intelligence (AI) to review requests. This is also the first prior authorization program for ASCs, whereas the current prior authorization program for these same services is limited to the hospital outpatient setting – and as a result, this is likely to pose operational challenges for these facilities.

But the good news is that unlike the national hospital outpatient prior authorization program, for the ASCs, obtaining prior authorization is not a condition of payment. For outpatient hospitals, being a condition of payment means if a prior authorization was not obtained, the claim is denied, with no opportunity to appeal based on medical necessity.  

Without this condition of payment, ASCs can proceed as they currently do, not submitting any information prior to surgery and submitting their claims, which will then result in a request for medical records. If the medical records support the medical necessity of the procedure, the ASC claim will be paid.

But the lack of prior authorization will also mean that the claim submitted by the surgeon, the anesthesiologist, the pathologist, and any other professional claims submitted will also result in a request for records, and not payment. And while the MAC will have the medical records from the ASC to support their claim, the providers will each need to submit their own records and cannot piggyback on the ASC submission. That creates a significant duplicative work burden.

As noted, this program starts in three months. I hope that we will hear from the MACs in the interim, with education and standardized guidelines for submission of the required elements.

Finally, a reminder that the MACs have officially taken over the short-stay reviews as of Sept. 1. If you get audited, contact me.

I would love to hear about how they did, and I promise that I never reveal sources.