The Centers for Medicare & Medicaid Services (CMS) is implementing prior authorization to test whether prior authorization helps reduce expenditures, while maintaining or improving access to and quality of care. CMS believes using a prior authorization process will help ensure services are provided in compliance with applicable Medicare coverage, coding, and payment rules before services are rendered and claims are paid.
Prior authorization does not create new clinical documentation requirements. Instead, it requires the same information necessary to support Medicare payment, just earlier in the process. Prior authorization allows providers and suppliers to address issues with claims prior to rendering services and submitting claims for payment, which has the potential to reduce appeals in the case of disputed claims. This will help ensure that all relevant coverage, coding, and payment requirements are met before the service is rendered to the beneficiary and before the claim is submitted for payment.