§ 422.138 Prior authorization.

(a) Requirement. When a coordinated care plan, as specified in § 422.4(a)(iii) (including MSA network plans), uses prior authorization processes in connection with basic benefits or supplemental benefits, the MA organization must comply with the requirements in this section. (MA PFFS are not permitted to use prior authorization policies or “prior notification” policies that reduce cost sharing for enrollees based on whether the enrollee or provider notifies the PFFS plan in advance that services will be furnished). Prior authorization processes include all policies and procedures used in prior authorization unless otherwise noted. (b) Application. Prior authorization processes for coordinated care plans may only be used for one or more the following purposes: (1) To confirm the presence of diagnoses or other medical criteria that are the basis for coverage determinations for the specific item or service; or (2) For basic benefits, to ensure an item or service is medically necessary based on standards specified in § 422.101(c)(1), or (3) For supplemental benefits, to ensure that the furnishing of a service or benefit is clinically appropriate. (c) Effect of prior authorization, pre-service, or concurrent approval. If the MA organization approved the furnishing of a covered item or service through a prior authorization or pre-service determination of coverage or payment, or a concurrent determination made during the enrollee's receipt of inpatient or outpatient services, it may not deny coverage later on the basis of lack of medical necessity and may not reopen such a decision for any reason except for good cause (as provided at § 405.986 of this chapter and § 422.616) or if there is reliable evidence of fraud or similar fault per the reopening provisions at § 422.616. The definitions of the terms “reliable evidence” and “similar fault” in § 405.902 of this chapter apply to this paragraph (c).