CMS Clarifies Organization Determinations: Key Updates for Medicare Advantage

The Centers for Medicare & Medicaid Services (CMS) has introduced significant updates to clarify the definition and processes related to Medicare Advantage organization determinations, particularly in inpatient settings. The proposed rule reaffirms that decisions made during concurrent reviews, such as reclassifying an inpatient admission to outpatient or denying inpatient coverage, qualify as organization determinations under § 422.566.

These determinations must adhere to notification and appeal requirements to safeguard enrollees. CMS has highlighted past inconsistencies, where enrollees were not informed of such decisions, resulting in unexpected financial burdens.

The updated guidelines prioritize transparency and timely communication, ensuring enrollees are better protected and treated equitably. Additional details can be found on page 378 of the proposed rule.

What Is a Medicare Advantage Organization Determination?

A Medicare Advantage organization determinations, as outlined in §422.566 of the Code of Federal Regulations, is any decision by a Medicare Advantage (MA) organization about the benefits an enrollee is entitled to and their associated costs. This includes:

• Denials of services or payments, either in full or in part.
• Reductions or premature discontinuations of previously authorized treatments.
• Decisions about the appropriateness of inpatient admission status or level of care.

These determinations may occur before, during, or after the services are provided, and apply to both contracted and non-contracted providers. Such decisions are legally binding unless reconsidered, reopened, or revised.

When an MA organization issues an adverse Medicare Advantage organization determinations, such as a denial of coverage, CMS requires the following actions under the proposed rule:

1. Notification Requirements: Provide timely notice to the enrollee using a CMS-approved format, such as an Integrated Denial Notice (IDN), Explanation of Benefits (EOB), or another notice format open for public comment.
2. Medical Necessity Review: Ensure that decisions related to medical necessity are reviewed by a qualified healthcare professional.
3. Expedited Reconsideration: Allow the enrollee or their physician to request an expedited reconsideration if the decision impacts necessary services.
   

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Clarifications on Concurrent Review Decisions

CMS has identified recurring issues with how Medicare Advantage organizations handle concurrent review decisions, which assess the appropriateness of care while it is being delivered. Examples include:

• Revoking previously approved inpatient admissions.
• Changing inpatient status to outpatient observation.
• Denying inpatient coverage while suggesting outpatient reclassification.

CMS noted confusion in denial practices, where inpatient care is provided, but the MA plan denies coverage at the inpatient level. These denials blur the lines between coverage and payment decisions, as discussed on page 386 of the proposed rule.

Despite legal requirements to notify enrollees and offer appeal opportunities, CMS audits reveal that patients are often uninformed. For instance, hospitals may reclassify an enrollee’s status based on the MA organization’s decision without notifying the enrollee, leaving them unaware of potential cost-sharing or deductible implications.

Example Scenario

A patient admitted to an in-network hospital under inpatient status receives care as ordered by their physician. The hospital submits a Notice of Admission to the Medicare Advantage organization. During a concurrent review, the MA organization determines that the inpatient admission does not meet coverage criteria and denies inpatient coverage while approving outpatient observation services. The hospital, without informing the patient, may reclassify the admission to outpatient or continue providing non-covered inpatient care. The enrollee remains unaware until faced with unexpected financial obligations.

To address these discrepancies, CMS is reinforcing that concurrent review decisions are organization determinations under existing regulations. Proposed mandates require MA plans to provide timely notification of such decisions and strengthen audit protocols to ensure compliance with notice and appeal requirements.

Additionally, CMS emphasizes that appeals can only proceed when enrollees face financial implications, such as cost-sharing responsibilities, which could influence hospital strategies for initiating appeals.

Strengthening Medicare Advantage Integrity

By clarifying the definition of Medicare advantage organization determinations and ensuring compliance in concurrent review processes, CMS aims to uphold the integrity of the Medicare Advantage program.

Holding MA organizations accountable for transparent, timely, and equitable decision-making ensures enrollees are informed, empowered, and protected in their healthcare journeys. With these updates, enrollees can expect improved clarity, fewer unexpected costs, and greater confidence in their coverage.

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