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CMS Finalizes CY 2024 Medicare Advantage Rule

The final rule increases oversight of Medicare Advantage plans and seeks to better align traditional Medicare and Medicare Advantage coverage


The Centers for Medicare & Medicaid Services (CMS) April 5 finalized its Policy and Technical Changes to the Medicare Advantage (MA) and Medicare Prescription Drug Benefit Program for Contract Year (CY) 2024. The final rule increases oversight of Medicare Advantage (MA) plans and seeks to better align MA coverage with traditional Medicare.



The final rule will:

  • Prohibit MA plans from limiting or denying coverage for a Medicare-covered service based on their own internal or proprietary criteria if such restrictions don’t exist in traditional Medicare;
  • Direct MA plans to adhere to the “Two-Midnight-Rule” for coverage of inpatient admissions;
  • Limit MA plan ability to apply site of service restrictions not found in traditional Medicare; Require health plan clinicians reviewing prior authorization requests to have expertise in the relevant medical discipline for the service being requested;
  • Require prior authorizations to be valid for an entire course of approved treatment and to be valid through a 90-day transition period if an enrollee undergoing treatment switches to a new MA plan;
  • Establish additional processes to oversee MA plan utilization management programs including an annual review of policies to ensure consistency with federal rules;
  • Strengthen behavioral health network adequacy requirements;
  • Tighten MA marketing rules to protect beneficiaries from misleading advertisements and pressure tactics;
  • Expand requirements for MA plans to provide culturally and linguistically appropriate services;
  • Establish a new Health Equity Index to be incorporated into MA plan Star Ratings beginning in 2027;
  • Implement statutory provisions of the Inflation Reduction Act and the Consolidated Appropriations Act of 2021 related to prescription drug affordability and coverage for eligible low-income individuals.



Prior Authorization and Medical Necessity    Determinations

CMS finalized several updates designed to curtail improper MA plan prior authorization processes and ensure MA beneficiaries receive timely and appropriate access to medically necessary care. Specifically, the agency stipulates that MA plans may only utilize prior authorization processes to confirm whether a patient’s care is medically necessary, addressing concerns that plans were creating non-clinical barriers to care in their programs.

Additionally, the final rule requires that MA plans adhere to traditional Medicare coverage policies when making a medical necessity determination and cannot utilize alternative criteria to deny coverage of an item or service that would be approved under CMS rules. In response to hospital and health system advocacy, the final rule also explicitly clarifies that MA plans must adhere to the “Two-Midnight Rule” under traditional Medicare, which requires that an MA plan provide coverage for an inpatient admission when the admitting physician expects the patient to require hospital care that crosses two-midnights.

Furthermore, the final rule requires prior authorizations to be valid for the entirety of an approved course of treatment. This prevents plans from approving a reduced number of days of prescribed treatments or requiring additional prior authorizations for each treatment in a series prescribed by a provider. Plans also must have policies that permit no less than 90 days transition for new beneficiaries on established treatments prior to enrolling with the plan.


(Information provided courtesy of the American Hospital Association, AHA Special Bulletin April 7, 2023)