If you’ve had Medicare insurance coverage for a while, there’s a chance you may have run into something called prior authorization. Prior authorization can be confusing, especially since it can affect different parts of the Medicare program in different ways. In fact, during the COVID-19 pandemic, the Centers for Medicare & Medicaid Services (CMS) removed some prior authorization requirements in Medicare Advantage plans. But, what exactly did removing these requirements do? Is prior authorization needed with Original Medicare?
What is Prior Authorization in the Medicare Program?
Generally, a Medicare insurance prior authorization is an approval that a specific health care provider needs to receive from the Medicare program before they can give care. In this sense, prior authorization is the Medicare program confirming that the services given by the health care provider will be covered by the Medicare insurance plan and they’ll receive a payment. CMS uses this system to monitor payments and prevent improper billing by ensuring that the services given are medically necessary. These efforts are part of an overall Medicare insurance fraud and abuse prevention strategy by CMS.
Prior Authorization & Original Medicare
As we mentioned above, prior authorization requirements interact with the parts of the Medicare program differently. In Original Medicare, prior authorization isn’t required for most services. Prior authorization requirements in Original Medicare usually involve durable medical equipment (DME). It’s the other two parts of the Medicare program that deal with prior authorization much more. This is because Original Medicare (Medicare Parts A and B) is offered by the federal government. Part C and Part D plans are offered by private insurers, though CMS does approve their plans.
Medicare Advantage, Medicare Part D, & Prior Authorization
In Medicare Advantage, you are much more likely to have prior authorization required for certain services. These are generally more expensive services like DME, ambulance services, skilled nursing stays, and inpatient hospital care. Some plans will require prior authorization for mental health services, podiatry services, and home health care. With Medicare Advantage, you’ll also frequently see plans require prior authorization to see specialists and receive out-of-network care.
Similarly, Medicare Part D has its own prior authorization requirements, put in place to ensure that the medications being given out are medically necessary and safe. Prior authorizations can also act as cost-saving policies. One Part D prior authorization of note is called step therapy, where you’ll be prescribed a less expensive but comparable drug to the name brand. If that doesn’t treat your condition, you’ll try a more expensive option, moving up the tiers until you’re at the most expensive option. You can learn more about Medicare Part D prior authorizations and different limitations on coverage in our article “The Coverage Rules for Medicare Part D Plans.” You should also be able to see which medications need prior authorization by looking at your plan’s formulary.
The Difference Between Prior Authorizations & Pre-Claim Reviews
There’s a different type of authorization involved in Medicare insurance coverage called a pre-claim review. Prior authorization and pre-claim review differ in when the services are reviewed and allowed to be given. When you need a health care service that requires prior authorization, your health care provider will submit the request for you with all the important medical information. Then, they’ll wait to provide the health care service until they receive approval, usually after the Medicare Administrator Contractor (MAC) reviews the submission. A pre-claim review is also done to ensure that Medicare insurance will cover a specific service in question, but this type of authorization allows the health care provider to perform the service before submitting the review request to the MAC.
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Prior authorization offers Medicare insurance beneficiaries and coverage providers several benefits. It helps cut costs for Medicare insurance coverage, which helps the system remain stable in the long run while also preventing unnecessary medical services and billings. While they may seem like a pain, these long-term safeguards can help the Medicare program offer the coverage you want for years to come.