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The Prior Authorization Process: Need-to-Know Changes for 2021

August 4, 2021
Jennifer Bishop

Vice President, Product Content

Article Summary


In 2021, the Centers for Medicare and Medicaid Services (CMS) is updating the Prior Authorization for Certain Hospital Outpatient Department Services, which took effect in July 2020. Key elements of CMS’s changes include new service groups and submission guidelines. Health systems can prepare for these updates and avoid processing delays by organizing around the changes, including identifying a point person to track involved patients and follow up on decision letters.

Notably, the prior authorization changes include the addition of two service groups:

1. Implanted spinal neurostimulators.
2. Cervical fusion with disc removal.

prior authorization process

Health systems will want to take note of upcoming changes from the Centers for Medicare and Medicaid Services (CMS) to prior authorization rules. Specifically, the agency is updating the Prior Authorization for Certain Hospital Outpatient Department Services, which began July 1, 2020. As part of the 2021 Outpatient Prospective Payment System/Ambulatory Surgical Center Final Rule, CMS is adding Implanted Spinal Neurostimulators and Cervical Fusion with Disc Removal to the prior authorization process for services provided on or after July 1, 2021.

Healthcare leaders can prepare for these prior authorization changes and avoid processing delays by observing several key elements, including new service groups and submission guidelines.

Two New Service Groups Require Prior Authorization

Health systems must obtain prior authorization for the following new service groups as of July 1:

  1. Implanted Spinal Neurostimulators: CMS will only require prior authorization when providers report Current Procedural Terminology (CPT®) code 63650. The agency has temporarily removed CPT codes 63685 and 63688 from the list of services requiring prior authorization and will monitor prior authorization for spinal neurostimulators to determine if it will add additional codes in the future. It’s also notable that CMS will only require prior authorization for trial implantation procedures for providers reporting both trial and permanent implantation procedures using 63650.
  2. Cervical Fusion with Disc Removal: CMS will require prior authorization for claims containing CPT® code 22551 or 22552.

In addition to the two new service groups above, the prior authorization process will remain in effect for the five groups of services previously identified as high risk for improper payments, including: blepharoplasty, botulinum toxin injections, panniculectomy, rhinoplasty, and vein ablation procedures. The full listing of impacted codes can be found here.

Avoiding Prior Authorization Processing Delays

As a reminder, health systems should submit a prior authorization request to their Medicare Administrative Contractor (MAC) for all Medicare patients scheduled to undergo one or more of the relevant procedures if their hospital has not received a Notice of Exemption. Although there is no single national form for submitting prior authorization requests, providers should include the following elements when submitting their request to avoid processing delays:

  1. Beneficiary information: Patient name, Medicare beneficiary identifier, and date of birth.
  2. Hospital outpatient department information: Facility name, provider transaction account number/ certification number (PTAN/CCN), National Provider Identifier (NPI), and address.
  3. Physician information: The performing physician’s name, address, PTAN, and NPI.
  4. Requestor information: Requestor name, phone number, and address. (The hospital is responsible for obtaining the authorization, but CMS permits the physician to assist the facility in obtaining the required information.)
  5. Other information: The prior authorization request should include the anticipated date of service, Healthcare Common Procedure Coding System (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 for requesting an expedited review (if applicable).

Navigating the Current Exemption Cycle

In February 2021, MACs worked to identify hospitals that qualified for the current exemption cycle and provided these hospitals with a written Notice of Exemption in March. Hospitals that received affirmations for at least 90 percent of their submitted prior authorizations should have received a Notice of Exemption from the prior authorization process for dates of service on or after May 1, 2021.

Hospitals receiving a Notice of Exemption don’t need to submit prior authorization requests during the exemption cycle. The MAC will reject any prior authorization requests it receives during the exemption cycle.

In September 2021, exempt providers can expect to receive an Additional Documentation Request from their MAC. These requests will help determine whether the hospital will continue as an exempt facility for the next exemption cycle. Once the MAC receives the Additional Documentation Request, health systems have 45 days to provide 10 claims containing at least one of the seven services requiring prior authorization.

Facilities falling below the 90 percent affirmation threshold will receive a Notice of Withdrawal of Exemption no later than December 17, 2021. These organizations must submit prior authorization requests for services provided on or after March 1, 2022, per the established process. Facilities meeting the 90 percent threshold for continued exemption can expect to receive a Notice of Exemption for the next exemption cycle.

CMS will also assess hospitals that didn’t receive a Notice of Exemption in March 2021 in September 2021 to determine if they qualify for a Notice of Exemption for the next cycle. This exemption cycle assessment will continue every March and September. Providers should direct questions regarding their affirmation rates or current exemption status to their MAC. A current listing of MAC websites is available here.

Organization Is Key to the Prior Authorization Process

With organization key to prior authorization, health systems can optimize the process by making one point person responsible for tracking patients requiring prior authorization and following up on decision letters. Additionally, having a team behind this point person can help obtain and submit the required information and provide back-up when the main contact is unavailable. Organizations should keep a log for all submitted requests, decisions received, and final billing outcomes. Remember that as a new process for everyone, the MACs may issue denials incorrectly. Organizations receiving a denial have full appeal rights to use when appropriate.

Additional Reading

Would you like to learn more about this topic? Here are some articles we suggest:

  1. A Five-Step Audit for Peak Charge Capture Performance
  2. Charge Capture Optimization: Target Five Hotspots to Boost the Bottom Line
  3. The 2021 Healthcare Financial Forecast: What to Expect, How to Prepare
  4. The Complete Guide to MIPS 2021: Scoring, Payment Adjustments, Measures, and Reporting Frameworks
  5. Evolving CMS Quality Measures Move Towards More Patient-Centered Care, Less Burden for Clinicians
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