CMS Proposes Updates to Medicare Advantage Utilization Management Policies + Overpayment Standards: Comments Due Feb. 13

CMS recently issued a proposed rule that, among several other revisions, could change utilization management and prior authorization criteria for Medicare Advantage (MA) plans as well as amend the standard for an identified overpayment – both of which could impact providers. CMS is accepting comments on the proposed rule until Feb. 13, so take this opportunity to make your voice heard.

Potential Changes to MA Authorization Requirements Could Reduce Barriers for Patients + Providers

CMS is looking to address concerns they’ve heard loud and clear in recent years – the utilization management process, including prior authorizations, for MA plans can create unnecessary barriers to patients’ access to medically necessary care. CMS cited a 2022 report by the Office of the Inspector General (OIG) which found some MA plans inappropriately deny prior authorization requests even when the services meet Medicare coverage guidelines.

To address these concerns, CMS proposes MA plans follow the same coverage criteria and utilization management policies as Traditional Medicare to significantly reduce the administrative burden on providers and ensure Medicare enrollees have consistent access to medically necessary care without unreasonable barriers or interruptions.

Specific proposed changes include:

  • MA coordinated care plans (HMO, PPO) may only use prior authorization policies to:
    • Confirm the presence of diagnoses or other medical criteria that are the basis for coverage determinations for the specific item or service
    • Ensure a basic benefits item or service is medically necessary based on specific standards, or
    • Ensure a supplemental service or benefit is clinically appropriate.
  • MA plans must ensure that any approvals it grants through prior authorization processes will be valid for the duration of the approved course of treatment and that it provides a minimum 90-day transition period when an enrollee who is currently undergoing treatment switches to a new MA plan.
  • MA plans must comply with national coverage determinations (NCD), local coverage determinations (LCD) and general coverage and benefit conditions included in Traditional Medicare statutes and regulations as interpreted by CMS. This proposal is designed to prohibit MA plans from limiting or denying coverage when the item or service would be covered under Traditional Medicare. The proposed revisions indicate that the Traditional Medicare coverage criteria for inpatient admissions, Skilled Nursing Facility (SNF) care, Home Health Services, and Inpatient Rehabilitation Facilities (IRF) would apply to basic benefits in the MA program.
  • MA plans cannot deny coverage of a Medicare covered item or service based on internal, proprietary, or external clinical criteria not found in Traditional Medicare coverage policies. When there are no applicable coverage criteria in Medicare statute, regulation, NCD, or LCD, MA organizations may create internal coverage criteria that are based on current evidence in widely used treatment guidelines or clinical literature that is made publicly available to CMS, enrollees and providers.
  • MA plans must establish a Utilization Management Committee to review all utilization management policies annually, including prior authorization and ensure they are consistent with current traditional Medicare’s national and local coverage decisions and guidelines.

Submit a comment at voicing your support for these changes before Feb. 13. Here is the comment we are submitting as an example.

Changing the Standard for an “Identified Overpayment”

CMS’s proposed rule also seeks to amend the standard for an identified overpayment from its current “reasonable diligence” standard to the False Claims Act’s “knowing” standard. Under the proposed rule, an MA organization, Part D sponsor, provider, or supplier has identified an overpayment if it has actual knowledge of the existence of the overpayment or acts in reckless disregard or deliberate ignorance of the overpayment.

The current “reasonable diligence” standard was challenged in recent litigation involving UnitedHealthcare. These proposed changes to the overpayment standard appear to be in response to the court decisions associated with that litigation. The proposed removal of the “reasonable diligence” standard and adoption of the FCA “knowledge” standard for overpayments would apply to Medicare Parts A, B, and D, in addition to Part C.

Providers should continue to monitor these proposed changes to anticipate any needed changes to their compliance programs.


Contact one of our revenue cycle experts today if your organization needs support or has further questions.

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.