CMS Final Rule: Changes to the Medicare Advantage Program

Featuring: Cara Tucker | Legal Counsel-Regulatory

On April 5, 2023, the Centers for Medicare & Medicaid Services (CMS) issued a final rule that requires Medicare Advantage (MA) plans to follow traditional Medicare laws for coverage decisions, limits the use of prior authorization, mandates continuity of care for Medicare beneficiaries and establishes a Utilization Management Committee with a heightened standard for adverse medical necessity decisions.

The regulation is set to take effect on June 5, 2023, with the utilization management requirements applicable to coverage beginning January 1, 2024.

This move is seen as a positive development for healthcare providers, as it brings MA plans closer in alignment with traditional Medicare, which many consider to be the gold standard. The American Hospital Association commented the final rule helps curtail “overly restrictive coverage policies that can impede access to care and add cost and burden to the healthcare system.”

Key changes in the final rule include:

  • MA plans must follow traditional Medicare laws when making coverage decisions for basic benefits (Part A and Part B), including national and local coverage determinations (NCD and LCD). This includes criteria for inpatient admissions and the Inpatient-Only List as well as the “two-midnight rule” benchmark for hospital inpatient admissions. When Medicare laws don’t fully establish criteria, MA plans may create their own coverage criteria based on widely used treatment guidelines or clinical literature. These coverage criteria must be publicly accessible, which hopefully will provide much-needed transparency to providers.
  • Prior authorization processes can only be used to confirm medical criteria for coverage determinations for the specific line of service, ensure medical necessity for basic benefits or ensure clinical appropriateness for supplemental benefits. Any prior authorization processes that don’t meet these requirements, including when used for cost containment or delay of services, will be considered non-compliant with CMS regulations.
  • Continuity of care requirements must be met for Medicare beneficiaries with respect to basic benefits. Prior authorization for a course of treatment must be valid for as long as medically necessary to avoid disruptions in care. MA plans must provide a minimum 90-day transition period for beneficiaries who are already undergoing a course of treatment when they enroll in an MA plan. This applies even if the beneficiary’s current provider is out-of-network with the new MA plan.
  • MA plans must establish a Utilization Management Committee to annually review all utilization management policies and procedures, including prior authorization, to ensure they are consistent with Medicare coverage criteria requirements.
  • A heightened standard is applied for physician or other healthcare professionals who review adverse medical necessity decisions. The physician must have “expertise in the field of medicine or healthcare that is appropriate for the services at issue.”

In summary, this new rule introduces several key changes that will promote transparency and consistency in healthcare coverage decisions for MA beneficiaries, while ensuring healthcare providers are able to provide the best possible care to their patients.


Cara Tucker has been an attorney for over 10 years, specializing in healthcare and regulatory compliance. She currently serves as legal counsel managing regulatory updates at Ensemble Health Partners, developing legally based strategies and procedures to holistically resolve systemic payor issues to increase revenue, reduce administrative burdens and mitigate risk.

These materials are for general informational purposes only. These materials do not, and are not intended to, constitute legal or compliance advice, and you should not act or refrain from acting based on any information provided in these materials. Neither Ensemble Health Partners, nor any of its employees, are your lawyers. Please consult with your own legal counsel or compliance professional regarding specific legal or compliance questions you have.