Recent Medicare Developments on Treatment Approvals
There have been two significant updates regarding advance approval for treatments and services for those enrolled in Medicare.
Generally, health insurance plans don’t cover various treatments without prior approval from the insurance firms, which has stirred some controversy over the years.
Original Medicare itself typically doesn’t require pre-approval for most care, although there are a few exceptions. Generally, the agreement between the provider and the patient dictates the treatment plan, and subsequent documentation is submitted to Medicare for reimbursement.
Recently, Medicare introduced a new model program designed to test out the idea of pre-approval.
This voluntary program will test pre-approval requirements for select services and treatments, as detailed in a recent announcement from the Center for Innovation at the Center for Medicare and Medicaid Services.
The initiative is looking for healthcare providers interested in participating from January 1, 2026, to December 31, 2031. It will be limited to specific states, including New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington.
Providers who join the program will need to seek prior approval for 17 specific items and services. These include skin alternatives, deep brain stimulation for Parkinson’s disease, impotence treatment, and arthroscopy for osteoarthritis of the knee.
Interestingly, providers can decide not to ask for pre-approval in certain cases. However, they risk not being reimbursed by Medicare for the treatments they provide if they opt out of the approval process.
This initiative emerged from reports identifying issues like waste, fraud, or abuse in particular service areas. For instance, data from the Medicare Payment Advisory Committee indicated that Medicare spent as much as $5.8 billion in 2022 on services that were unnecessary or provided without clear clinical benefits.
Under this model, providers will submit the same information they currently provide for payment approval after treatment, but the key difference is that it will be submitted beforehand, and approval will be awaited before the treatment is conducted.
CMS will handle the prior approvals and will select which companies will undergo review. The program is expected to incorporate artificial intelligence and other analytical tools to validate the submissions made by providers.
Providers will be compensated based on the extent to which they help save government funds by reducing unnecessary services.
CMS has promised to oversee this initiative in a way that minimizes any negative impact on patients and healthcare providers.
In another development concerning pre-approval, attention has shifted to the Medicare Advantage Plan. The pre-approval process for this plan has sparked recent debate.
Reports and studies have indicated that this approval process can delay treatments or lead patients to abandon their treatment plans altogether. Interestingly, a significant number of treatments initially denied compensation were later approved upon appeal by patients or their healthcare providers.
Moreover, over 50 major insurance companies that sponsor various types of plans have announced a commitment to simplify the pre-approval process for treatments and services across all insurance markets, including Medicare Advantage Plans. This streamlined approach is set to be rolled out by January 1, 2027.
