CMS Expands OPD Prior Authorization Requirements

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As announced in the OPPS Final Rule, effective with July 1, 2021 dates of service, Centers for Medicare and Medicaid Service (CMS) is adding two additional hospital outpatient department (OPD) that will require prior authorization: cervical fusion with disc removal and implanted spinal neurostimulators.

CMS implemented a prior authorization process for hospital OPD services for a select number of services effective with dates of service July 1, 2020. The original framework of the prior authorization requirements for OPS services was limited to five services: blepharoplasty, botulinum toxin injections, panniculectomy, rhinoplasty, and vein ablation.

Cosmetic or Not?

Taking a closer look at the original 5 procedures listed as requiring prior authorization makes some sense. All five codes could be done for cosmetic purposes which have no medically necessary purpose supporting payment by Medicare or the same procedure can be performed for medical reasons.

Taking a closure look:

Blepharoplasty –  this procedure is used to modify or reconstruct the relaxation of skin around the eye. This can be due to excess skin, lack of muscle function, and/or an increased accumulation of fat. Medical Necessity – the patient’s visual field can be reduced with excessive skin. A medically necessary blepharoplasty can remove the excess skin and increase the patient’s visual field. Cosmetic – vanity. Patients may want the excess skin removed for purposes of looks without a medical purpose.

Botulinum toxin injections – this type of injection is often used for several clinical reasons from blocking signals to a nerve, treating chronic migraines, and to relieve bladder dysfunction. The agents of the injection block signals in a nerve that triggers muscles to contract. Medical Necessity – the original creation of the injection was to treat eye twitching and later in the early 1990s it was discovered by Drs. Alastair Carruthers and wife Jean Carruthers, the injection could also be used for cosmetic purposes. Cosmetic – vanity. Botox is the more common name. For cosmetic reasons, injections are placed in areas to treat wrinkles in and around the face.

Panniculectomy – this surgical procedure is the removal of excess skin from the abdominal area. Generally, the excess skin is caused by weight loss or multiple pregnancies causing permanent stretching of the skin. Medical Necessity – the removal of overhanging skin can interfere with a patient’s life, mobility, and can cause skin infections. Often, excess skin is removed generally when the excess abdominal skin (that can weigh several pounds) impacts the ability to walk, causes chronic pain, inflicts skin ulcerations, and for other medical reasons. Cosmetic – vanity. Removal of the excess skin can be performed for no needed reason other than self-confidence.

Rhinoplasty – is a surgical procedure to reshape the nose. Medical Necessity – the procedure is performed to improve abnormal function, decreased ability to breathe, and treating congenital or acquired deformities (such as a result of an injury). Cosmetic – vanity. Patients may have their nose reshaped for mere appearance even though there is no medical issue.

Vein ablation – this is a surgical procedure most commonly used to treat varicose veins or what is sometimes referred to as spider veins. They appear near the surface of the skin, can bulge, and have a colored appearance of purple or green. Medical Necessity – this procedure is sometimes necessary as varicose veins can be painful, ache, swell, or cause a burning sensation among other symptoms. Cosmetic – vanity. The mere appearance of varicose veins can be bothersome to patients for mere visual reasons but does not have a medical issue.

New Services added to OPD Prior Authorization Requirement July 1, 2021

Two new service categories are effective July 1, 2021: cervical fusion with disc removal and implanted spinal neurostimulators.  Cervical fusion is a procedure to remove any compromise impacting the nerve.  The neurostimulator procedure is generally used to treat pain.

Unlike the original 5 services, the two new services are not associated with cosmetic purposes. The addition to the two new services are due to the medical requirements that must be met before a Medicare patient would be considered eligible for the service to be covered.

Hospital OPD who perform both a trial and permanent implant of a spinal neurostimulator using CPT 63650 are only required to submit a prior authorization for the trial procedure. To avoid a denial, the provider must include the unique tracking number (UTN) for the trial procedure on the claim form.

Exemptions of Prior Authorizations

There is an interesting concept under the Prior Authorization (PA) requirement in which CMS will allow, based on their discretion, hospital OPD to be exempt from having to submit a prior authorization for the seven defined services. To be considered for the exemption, there must be demonstrated compliance with Medicare coverage, coding, and payment rules. Once a provider is granted an exception, the exception remains until CMS determines to withdraw the exemption.

Qualifying for an exemption of the prior authorization the provider must:

  • Submit at least 10 prior authorization requests
  • Achieve a PA provisional affirmation threshold of at least 90% during a semiannual assessment

Medicare has determined that if the above requirements are met by a provider, they have demonstrated the requirements for submitting an accurate claim. Notice of the exemption or withdrawal of an already issued exemption would be provided at least 60 days prior to the effective date.

If a provider meets the exemption requirement, the exemption will apply to the two new additional services effective July 1, 2021.

As part of the exemption consideration process, there is a post payment additional document request (ADR) that would occur for 10 claims. This process is to review coding and coverage requirements to ensure compliance. Once a Medicare Administrative Contractor has finalized their compliance rate, they will not change it. If in the 10-claim review process the provider appeals and the appeal results in an overturn, the compliance rate will not change the provider’s exemption status.

Associated Services Codes

Each of the 5 service categories requiring a prior authorization have an associated code list determined by CMS.  Currently CMS has not published an associated code list for cervical fusion with disk removal or implanted spinal neurostimulators.

If a prior authorization is denied all services associated with the OPD service will be denied by Medicare.

Program Exclusions

The prior authorization program does not apply to the following claim types:

  • Veterans Affairs
  • Indian Health Services
  • Medicare Advantage
  • Part A and Part B Demonstration
  • Medicare Advantage sub-category IME only claims
  • Part A/B Rebilling
  • Emergency Department claims submitted with an ET modifier or revenue code 045x.

Advance Beneficiary Notice (ABN)

Appropriately issuing an ABN is a critical mechanism for providers to preserve their right to bill the patient.  For procedures subject to the prior authorization requirement that are denied or receive a non-affirmed prior authorization due to lack of medical necessity or not medically reasonable, the provider should issue an ABN in advance of the service.  In this case the provider would submit the claim with modifier GA.

Operational Considerations

To help ensure compliance with the prior authorization service requirements, hospital outpatient departments should educate the appropriate operational areas who are responsible for obtaining prior authorization. These prior authorizations run a slightly different course and if a non-affirmative determination is made, there are a number of associated codes that will be denied. This underscores the need for education and training regarding ABNs. Consider having an edit in place for 63650 to ensure the UTN is placed on the claim to prevent denials.

More information regarding the prior authorization requirements can be found here.