Hospital Outpatient Departments Eligible for Prior Authorization Exemption

Those that demonstrate compliance with Medicare coverage, coding, and payment rules related to prior authorization are eligible for a 12-month exemption.

Hospital outpatient departments (OPDs) that demonstrate compliance with Medicare coverage, coding, and payment rules related to prior authorization may be eligible for exemption. Exemptions are assessed yearly and remain in effect for a 12-month period or until the Centers for Medicare & Medicaid Services (CMS) elects to withdraw the exemption.

To meet eligibility requirements, OPDs must submit at least 10 prior authorization requests (PARs) during the standard review period and achieve a provisional affirmation compliance rate of at least 90 percent. Notice of exemption or withdrawal from exemption will be provided at least 60 calendar days prior to the effective date.

The Process

August 1: Exempt providers receive an additional documentation request (ADR) for a random 10-claim post-pay review.

• Claim samples are selected from dates of service (DOS) January 1 through June 30 during the exemption period. (Providers who do not have a minimum of 10 finalized claims within this DOS timeframe will not participate in the ADR process and will be withdrawn from exemption.)
• Providers have 45 calendar days to submit documentation.
• Medicare Administrative Contractors (MACs) have 45 calendar days to review.

OPDs who submit additional documentation after the initial 45-day response timeframe will not have their compliance rate changed if the MAC has already finalized their compliance rate and sent notification to the OPD. The MAC will review late documentation, issue a review determination, and make a claim adjustment, if necessary. Claim denials are subject to the normal appeals process; however, overturned appeals will not change the OPD’s exemption status.

November 2: MACs send notification letters for either continued exemption or withdrawal from exemption.

December 18: Providers who received a notification of withdrawal from exemption may start to submit PARs in advance of the January 1 review cycle.

January 1: The standard cycle begins for providers who met the compliance rate threshold.

Exempt OPDs

Exempt OPDs should not submit PARs during the exemption period. PARs submitted for exempt providers will be rejected. A requestor submitting on behalf of an OPD who is unaware of the OPD’s exemption status should contact the OPD and request a copy of the exemption notification letter.

Exempt providers will be given the option to opt out of the exemption process. By opting out of exemption, providers will return to the standard review process and be required to submit PARs.

Non-Exempt OPDs

When an OPD does not qualify for exemption, it must continue submitting PARs. Exemption review continues on a yearly basis. An OPD’s compliance will be assessed through its affirmation rates yearly in October.

Learn More

Visit the Novitas website for prior authorization exemption FAQs or CMS for the full Operational Guide.

If you have questions regarding the exemption process or the notice of exemption letter that you have received, please contact PA customer service at: 855-340-5975.

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Lee Fifield

Development Editor at AAPC

Lee Fifield has a Bachelor of Science in communications from Ithaca College, Ithaca, New York, and has worked as a writer and editor for two decades.

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