Hospital Outpatient Department Prior Authorization Requirement

The 2020 Medicare Outpatient Prospective Payment System (OPPS) final rule includes new prior authorization requirements for certain hospital outpatient services. These prior authorization requirements will go into effect on July 1, 2020.

Requirement Overview

As an initial effort to control rising outpatient costs, and to analyze increasing volumes of certain outpatient procedures, the Centers for Medicare & Medicaid Services (CMS) will implement a prior authorization process. CMS’s initial focus is on procedures that are likely to be cosmetic surgical procedures or are services directly related to cosmetic surgical procedures, which are not typically covered by Medicare but which providers may combine with or inaccurately represent as covered therapeutic services.

Medicare Outpatient Services Requiring Prior Authorization Starting July 1, 2020

  • Blepharoplasty
  • Botulinum toxin injections
  • Panniculectomy
  • Rhinoplasty
  • Vein ablation

Process Overview

  • When a prior authorization request is submitted to the Medicare Administrative Contractor (MAC), the request will be assigned a unique tracking number (UTN). The UTN must be included on any claim submitted for the services.
  • The MAC is expected to issue a decision (provisional affirmative or non-affirmative) within 10 business days.
  • MACs are expected to react to expedited review requests (when a delay could seriously jeopardize the beneficiary’s life, health, or ability to regain maximum function) within two business days
  • Claims associated with or related to a non-affirmed services will be denied as well (example: anesthesiology, physician services, and facility services)

Other Notable Information

  • CMS may exempt a provider from the prior authorization process upon a provider’s demonstration of compliance, defined as a prior authorization provisional affirmation threshold of at least 90 percent during a semiannual assessment
  • This prior authorization process is being adopted under section 1833(t)(2)(F) of the Social Security Act, which is specific to the OPPS and only governs payments to hospital outpatient departments. The hospital is ultimately responsible for ensuring this condition of payment is met.
  • This new requirement does not impact:
    • Ambulatory Surgery Centers (ASCs)
    • Medicare Advantage (although Medicare Advantage plans are generally permitted to adopt their own prior authorization requirements)
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