Outpatient Department Prior Authorization Exemption

Published 06/30/2021

The Centers for Medicare & Medicaid Services (CMS) may elect to exempt a Part A provider from the prior authorization (PA) process upon a provider’s demonstration of compliance with Medicare coverage, coding and payment rules. This exemption would remain in effect until CMS elects to withdraw the exemption. CMS would exempt providers, who have submitted a minimum of 10 Prior Authorization Requests (PARs) and achieve a PA provisional affirmation rate threshold of at least 90 percent during a semiannual assessment.

CMS believes that, by achieving this percentage of provisional affirmations, the provider would be demonstrating an understanding of the requirements for submitting accurate claims. In addition, CMS may withdraw an exemption if evidence becomes available that the provider no longer remains at or above a 90 percent compliance rate, per Medicare’s billing, coding and payment requirements. In the interest of helping ensure providers incur the least burden possible, CMS will notify providers at least 60 days prior to the effective date of their exemption.

How Will the Percentage Be Calculated?
The rate of initial Prior Authorization Requests (PARs) will be calculated with a provisional affirmation decision against all submitted PARs from that provider during a given six-month standard cycle to determine the compliance rate. The initial PA decisions for all seven OPD service categories will be included.

Note: Calculated via the formula: Compliance Rate = (Total number of initial PARs with a provisional affirmation decision within a given six-month standard cycle) / (Total number of initial PARs within the same six-month standard cycle).

How Will You Be Notified?
You will receive a written notice of an exemption by U.S. mail no later than the first business day on or after March 1 or September 1, allowing at least 60 days prior to the effective date of the next exemption cycle (May 1 or November 1, respectively).

Notification will also be available in the eServices portal, if you are registered and able to receive such information.

Determination for Continuation/Withdrawal from Exemption
Exempted providers should expect to receive an additional documentation request (ADR) on the subsequent September 30 or April 2, depending upon which exemption cycle they are in at the time, for 10 claims. This will be a 10-claim random post payment sample, from the prior six-month cycle, for the purpose of determining continued compliance.

Providers who fall below a 90 percent claims approval rate following each six-month exemption cycle, will be returned to the prior authorization (PA) process. A notice of the withdrawal of exemption status will be sent to the provider, via U.S. mail, by December 17 or June 19, allowing at least 60 days prior to the effective date of the next standard cycle (March 1 or September 1, respectively). This notification will also be made available in the eServices portal.

Providers continuing compliance of 90 percent or greater claims approval rate, will remain on exemption from PARs for the next six-month exemption cycle. A notice of continued exemption will be provided, prior to the start of the next exemption cycle, via U.S. mail and/or the eServices portal.

For more information regarding OPD PA and provider exemptions, please see the OPD Operational Guide (PDF, 260 KB).

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