Navigating the New Prior Authorization Process for Hospital Outpatient Departments

The Centers for Medicare & Medicaid Services (CMS) is implementing a new prior authorization program for certain services provided in a hospital outpatient department that begins July 1, 2020. Following is a summary of the program’s provisions and tips for successful implementation.

It is important to understand that the new prior authorization program only applies to certain services that are deemed to be at high risk for inappropriate reimbursement when these services are provided in a hospital outpatient department and billed on type of bill 13x. For now, other facilities, such as physician’s offices, critical access hospitals, ambulatory surgery centers, and other providers who submit claims on any type of bill other than 13x are not currently included in this prior authorization program. Although services provided in the physician’s office are not subject to the program, associated services including anesthesiology, physician services, and related facility claims will be denied if the service requiring prior authorization is denied.

Groups of Service

For procedures performed on or after July 1, 2020, prior authorization will need to be obtained for the following groups of services:

1. Botox injections: Prior authorization will only be required when one of the Botulinum Toxin codes (J0585, J0586, J0587, or J0588) is billed in conjunction with either Current Procedural Terminology (CPT®) code 64612 or 64615. Use of the Botulinum Toxin codes with procedure codes other than 64612 or 64615 will not require prior authorization.
2. Panniculectomy: Prior authorization will be required for CPT® codes 15830, 15847, or 15877.
3. Blepharoplasty, eyelid surgery, brow lift and related services: Prior authorization will need to be obtained for CPT® codes 15820, 15821, 15822, 15823, 67900, 67901, 67902, 67903, 67904, 67906, 67908, or 67911.
4. Rhinoplasty: CPT® codes 20912, 21210, 30400, 30410, 30420, 30430, 30435, 30450, 30460, 30462, 30465, and 30520 will require prior authorization under the new program. CMS removed CPT® code 21235 from this list on 6/10/20 after receiving feedback that code 21235 is frequently associated with procedures unrelated to rhinoplasty.
5. Vein ablation and related services: Procedures impacted include CPT® codes 36473, 36474, 36475, 36476, 36478, 36479, 36482, and 36483.

Submitting to Your MAC

A prior authorization request should be submitted to your Medicare Administrative Contractor (MAC) for all Medicare patients who are scheduled to undergo one or more of these procedures. Each MAC began accepting prior authorization requests on June 17, 2020, via mail or fax. Electronic submission of medical documentation (esMD) will be available beginning on July 6, 2020.

Although there is not a single national form for submitting the requests, the following elements should be included when submitting your request to avoid processing delays:

1. Beneficiary information: Patient name, Medicare beneficiary identifier, and date of birth are required.
2. Hospital outpatient department information: Facility name, PTAN/CCN, National Provider Identifier (NPI), and address should be included.
3. Physician information: The performing physician’s name, address, PTAN, and NPI are required.
4. Requestor information: The requestor should provide their name, phone number, and address. Note that the hospital is responsible for obtaining the authorization, but it is permissible for the physician to assist the facility in obtaining the required information.
5. Other information: The request should include the anticipated date of service, HCPCS codes, diagnosis codes, type of bill, units of service, indication of whether the request is an initial or subsequent review request, and the reason that an expedited review is being requested (if applicable).

Once this information is submitted to your MAC, a decision letter will be sent within 10 business days for a regular request or within 2 days for an expedited request. A request may receive a decision of provisional affirmation, non-affirmation, or provisional partial affirmation if the request contained a prior authorization request for multiple procedures. The letter will contain a Unique Tracking Number (UTN) that should be included on the claim as well as on all future correspondence, a decision regarding coverage, and details regarding missing or non-compliant elements of the request in the event that a non-affirmation decision is issued.

If you receive a provisional affirmation decision, you should be ready to go. Simply put the UTN from the decision letter in positions 1 through 18 of your electronic claim or in positions 19 through 32 for all other claim types.

If you receive a non-affirmation decision, you have several choices. You may choose to resubmit your request with the additional information requested by your MAC. Resubmissions may be submitted an unlimited number of times, but it’s important to remember that this is a prior authorization process, so requests may only be submitted prior to the procedure being performed.

You may also choose to issue an ABN to the patient and perform the procedure, knowing that the claim will be denied by Medicare. Even when you expect a claim to be denied for medical necessity and you have an ABN in hand, you should still request prior authorization and the UTN should be included on the claim. Without a valid UTN, the claim will be stopped for additional documentation and review of the ABN. Of course, the patient may choose not to have the procedure performed once they understand that the claim will not be paid by Medicare.

A Few Bright Spots

Complying with this new process will undoubtedly take a bit of time and adjustment, but there are benefits for you and for your patients. First of all, everyone will know whether or not the procedure is likely to be covered BEFORE the procedure is performed. This will help reduce surprise billing on the backend for the patient and give involved parties time to decide upon the best course of action.

Secondly, procedures that receive a provisional affirmation decision should receive some protection from future pre- and post-payment audits, unless CMS discovers a related pattern of fraud and abuse in the future.

Finally, CMS will be reviewing providers’ submissions and may elect to exempt providers who demonstrate compliance with this program during a semi-annual assessment.

Being organized will be key to this process, so it is recommended that a single point person along with a back-up person be given responsibility for obtaining necessary prior authorizations and for following up on decision letters. A log should be kept for all submitted requests, decisions received, and final billing outcomes.

Additional Resources

You can watch our on-demand webinar covering this topic, which also includes a listing of contact information for each MAC.

Additional information is available from CMS, including a helpful operational guide and a list of frequently asked questions.