Prior Authorization supporting statement PRA package

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Supporting Statement Part A 
Prior Authorization Process and Requirements for Certain Hospital Outpatient Department (OPD) Services 
(OMB#: 0938-1368; CMS-10711)
BACKGROUND
In the Calendar Year (CY) 2020 Outpatient Prospective Payment System/Ambulatory Surgical Center (OPPS/ASC) Final rule (CMS-1717-FC), we established a prior authorization process for certain hospital OPD services using our authority under section 1833(t)(2)(F) of the Social Security Act (the Act), which allows the Secretary to develop “a method for controlling unnecessary increases in the volume of covered OPD services.1”  The regulations governing the prior authorization process are located in Subpart I of 42 CFR Part 419, specifically at §§ 419.80 – 419.89.  In finalizing the process, we initially identified first five service categories for which prior authorization was required: (i) blepharoplasty, (ii) botulinum toxin injections, (iii) panniculectomy, (iv) rhinoplasty, and (iv) vein ablation.  As part of the CY 2021 OPPS/ASC Final Rule (CMS -1736-FC), we added two more service categories to the prior authorization process: (i) cervical fusion with disc removal and (ii) implanted spinal neurostimulators.  Through the CY 2023 OPPS/ASC Final Rule (CMS-1772-FC), CMS added eighth service category to the list of OPD services requiring prior authorization: Facet Joint Interventions.
The final rules stated that, as a condition of Medicare payment, a provider must submit a prior authorization request for services on the list of hospital OPD services requiring prior authorization to CMS or its contractor.  The prior authorization request must be submitted before the service is rendered to the beneficiary and before the claim is submitted.  The request should include all documentation necessary to show that the service meets applicable Medicare coverage, coding, and payment rules.  Claims submitted for services that require prior authorization that have not received provisional affirmation will be denied unless the provider is exempt.  The rules also stated that, even when a provisional affirmation has been received, a claim for services may be denied based upon either technical requirements that can only be evaluated after the claim has been submitted for formal processing or information was not available at the time the prior authorization request is received.
While most prior authorization reviews will be decided within 7 days, providers have an opportunity to submit prior authorization requests for expedited review when a delay could seriously jeopardize the beneficiary’s life, health, or ability to regain maximum function. 
If the request meets the applicable Medicare coverage, coding, and payment rules, CMS or its contractor will issue a provisional affirmation to the requesting provider.  If the request does not meet the applicable Medicare coverage, coding, and payment rules, CMS or its contractor will issue a non-affirmation decision to the requesting provider.  OPD prior authorization requests that are non-affirmed will not be considered an initial determination and, therefore, will not be appealable; however, the provider may resubmit a prior authorization request with any applicable additional relevant documentation provided the claim has not yet been submitted and denied.  This includes the resubmission of requests for expedited reviews.
If a claim is submitted for the selected services without provisional affirmation, it will be denied.  CMS intends to deny claims associated with or related to a selected service that requires PA as a condition of payment when a provider either did not submit a prior authorization request, received non-affirmation decisions, and/or has denied claims. 
Also, CMS may elect to exempt a provider from the prior authorization process upon a provider’s demonstration of compliance with Medicare coverage, coding, and payment rules, and that this exemption would remain in effect until CMS elects to withdraw the exemption.  CMS may elect to exempt providers that achieve a prior authorization provisional affirmation threshold of at least 90 percent during an annual assessment.  In addition, CMS may withdraw an exemption if evidence becomes available based on a review of claims that such claims do not meet Medicare’s billing, coding, or payment guidelines.  Moreover, CMS may suspend the outpatient department services prior authorization process requirements generally or for a particular service(s) at any time by issuing notification on CMS’ website.
As part of the CY 2027 OPPS/ASC rule, CMS expanded prior authorization requirements to include additional Botulinum Toxin Injection services. This addition was incorporated into the existing list of OPD services requiring prior authorization at § 419.83(a) for dates of service on or after July 1, 2027.  Data analysis for this service showed a claim volume increase greater than expected based on the growth rate for OPD services overall.  The process associated with prior authorization for these covered outpatient department services will be the same as the first eight service categories.
JUSTIFICATION
    1. Need and Legal Basis
Section 1833(t)(2)(F) of the Act authorizes CMS to develop a method for controlling unnecessary increases in the volume of covered OPD services.  CMS believes the increases in volume associated with certain covered OPD services described above are unnecessary because the data show that the volume of utilization of these OPD service categories far exceeds what would be expected in light of the average rate-of-increase in the number of Medicare beneficiaries. Therefore, CMS is using the authority under section 1833(t)(2)(F) of the Act to require prior authorization for certain covered OPD services as a condition of Medicare payment.  Furthermore, CMS is using the authority under paragraph (b) of 42 CFR 419.83 to add additional services. The reviews conducted under the program will help to reduce unnecessary utilization and payments for these services.
    2. Information Users and Use
The information required for the prior authorization request includes all documentation necessary to show that the service meets applicable Medicare coverage, coding, and payment rules. Trained clinical reviewers at the Medicare Administrative Contractors (MACs) will receive and review the information required for this collection.  Review of that documentation will be used to determine if the requested services are medically necessary and meet Medicare requirements in order to help reduce unnecessary increases for these services.
    3. Improved Information Techniques
Some of this collection of information could involve the use of electronic or other forms of information technology at the discretion of the requester.  Where available, requesters may submit their requests and/or other documentation through electronic means.  CMS offers electronic submission of medical documentation (esMD)2 , and the MACs provide electronic portals for providers to submit their documentation.
    4. Duplication and Similar Information
The CMS as a whole does not collect the information in any existing format.  With the exception of basic identifying information such as beneficiary name, address, etc., there is no standard form or location where this information can be gathered.
    5. Small Businesses
This collection will impact small businesses or other entities to the extent that those hospital outpatient departments that qualify as small businesses bill Medicare for the services that require prior authorization.  Providers regardless of size must maintain and submit the necessary documentation to support their claims.
    6. Less Frequent Collections
Under prior authorization, a request is submitted for a service prior to the service being rendered and the claim being submitted.  As the reviews under this program help reduce unnecessary increases in utilization for these services, less frequent collection of information would be imprudent and undermine that goal.  However, CMS has a process for less frequent collections for those providers who demonstrate compliance with Medicare rules after an initial assessment period.  CMS may elect to exempt a provider from the prior authorization process upon a provider’s demonstration of compliance with Medicare coverage, coding, and payment rules by achieving a prior authorization provisional affirmation threshold of at least 90 percent during an annual assessment.  An exemption may be withdrawn if a provider’s rate of non-payable claims submitted becomes higher than 10 percent during an annual assessment.
    7. Special Circumstances
There are no special circumstances.
    8. Federal Register Notice
The 60-day notice was published as part of a proposed rule on July 7, 2026 (91 FR 41734). A comment was submitted in response to this ICR questioning the burden estimates for staff involved in submitting requests. However, CMS believes that the burden estimates provided are accurate.
The 30-day notice 91 FR 70284was published November 6, 2026 as part of the final rule (CMS-1850-FC).
    9. Payments or Gifts to respondents
No payments or gifts will be given to respondents to encourage their response to any request for information under this control number.
    10. Confidentiality
Medicare contractors have procedures in place to ensure the protection of the health information provided.  The Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule allows for the disclosure of health records for payment purposes.  The MACs will safeguard all protected health information collected in accordance with HIPAA and Privacy Act standards as applicable.
    11. Sensitive Questions
There are no questions of a sensitive nature associated with this information collection.
    12. Burden Estimate
The information collection requirements associated with prior authorization requests for these hospital outpatient department services is the required documentation submitted by providers.  The prior authorization request must include all relevant documentation necessary to show that the service meets applicable Medicare coverage, coding, and payment rules.  The burden associated with this process is the time and effort necessary for the submitter to locate and obtain the relevant supporting documentation to show that the service meets applicable coverage, coding, and payment rules, and to forward the information to CMS or its contractor (MAC) for review and determination of a provisional affirmation.  CMS expects that this information will generally be maintained by providers within the normal course of business and that this information will be readily available.  CMS estimates that the average time for office clerical activities associated with this task is 30 minutes, which is equivalent to normal prepayment or post payment medical review.  CMS anticipates that most prior authorization requests would be sent by means other than mail.  However, CMS estimates a cost of $5 per request for mailing medical records.
Current Eight Service Categories (Blepharoplasty, Botulinum Toxin Injections, Panniculectomy, Rhinoplasty, Vein Ablation, Cervical Fusion with Disk Removal, Implanted Spinal Neurostimulators, and Facet Joint Interventions):

CMS estimated that annually, at a minimum, there are 127,397 initial requests mailed during a year.  In addition, CMS estimated there 41,806 resubmissions of a request mailed following a non-affirmed decision.  Therefore, the total mailing cost is estimated to be $846,015 (169,203 mailed requests x $5).  We estimate that an additional 3 hours would be required for attending educational meetings and reviewing training documents. The average labor costs (including 100 percent fringe benefits) used to estimate the costs were calculated using data available from the Bureau of Labor Statistics (BLS) and based on the 2024 median rate for Miscellaneous Healthcare Support Occupations3.  Based on the BLS information, CMS estimates an average clerical hourly rate of $21.50 with a loaded rate of $43.00.  The prior authorization program does not create any new documentation or administrative requirements.  Instead, it would just require the currently needed documents to be submitted earlier in the claim process.  Therefore, CMS continues to use the clerical rate since we do not believe that clinical staff would need to spend more time completing the documentation than needed in the absence of the prior authorization policy.  The hourly rate reflects the time needed for the additional clerical work of submitting the prior authorization request itself.  CMS estimates that the total annual number of submissions would be 564,010 (394,808 submissions through fax or electronic means + 169,203 mailed submissions).  The annual burden hours, allotted across all providers, would be 316,412 hours (.5 hours x 564,010 submissions plus 3 hours x 11,469 providers for education).  The annual burden cost would be $14,451,731 (316,412 hours x $43.00 plus $846,015 for mailing costs).  For the total burden and associated costs for eight service categories, CMS estimates the annual burden to be 316,412 hours and $14,451,731 million.  
Annual Estimated Burden and Cost Table for the Prior Authorization Process and Requirements for Certain Hospital Outpatient Department (OPD) Services- (Current 8 Services)
Activity
Responses Per Year
(i.e. number of reviewed claims)
Time Per Response (hours) or Dollar Cost
Total Burden Per Year (hours)
Total Burden Costs  Per Year Using Loaded Rate
Fax and Electronic Submitted Requests- Initial Submissions
297,261
0.5
148,630
$ 6,391,090
Fax and Electronic Submitted Requests-Resubmissions
97,546
0.5
48,773
$ 2,097,239
Mailed in Requests- Initial Submissions
127,397
0.5
63,699
$ 2,739,057
Mailed in Requests- Resubmissions
41,806
0.5
20,903
$ 898,829
Mailing Costs
169,203
5
 
$846,015
Provider Demonstration- Education
11,469
3
34,407
$ 1,479,501
Total
 
 
316,412
$14,451,731

New Services for Botulinum Toxin Injections Category:

As with the current eight service categories, the burden associated with the prior authorization process for the new Botulinum Toxin Injection services would be the time and effort necessary for the submitter to locate and obtain the relevant supporting documentation to show that the service meets applicable coverage, coding, and payment rules, and to forward the information to CMS or its contractor (MAC) for review and determination of a provisional affirmation.  As stated above, we expect that this information would generally be maintained by providers and that the average time for office clerical activities associated with this task would be 30 minutes, which is equivalent to that for normal prepayment or post payment medical review.  We again anticipate that most prior authorization requests would be sent by means other than mail.  However, we estimate a cost of $5 per request for mailing medical records.  Based on CY 2024 data for the new services, we estimate that annually at a minimum there would be 17,699 initial requests mailed during a year.  In addition, we estimate there would be 5,808 resubmissions of a request mailed following a non-affirmed decision.  Therefore, the total mailing cost is estimated to be $117,537 (23,507 mailed requests x $5).  We estimate that an additional 3 hours would be required for attending educational meetings and reviewing training documents.
The average labor costs (including 100 percent fringe benefits) used to estimate the costs were calculated using data available from the Bureau of Labor Statistics (BLS) and based on the 2024 rate for Healthcare Support Workers4.  Based on the BLS information, we estimate an average clerical hourly rate of $22.14 with a loaded rate of $44.28.  The prior authorization program for this new service category would also not create any new documentation or administrative requirements.  Instead, it would just require the currently needed documents to be submitted earlier in the claim process.  Therefore, the estimate continues to use the clerical rate since we do not believe that clinical staff would need to spend more time on completing the documentation than would be needed in the absence of the prior authorization policy.  The hourly rate reflects the time needed for the additional clerical work of submitting the prior authorization request itself.  We estimate that the total annual number of submissions would be 78,358 (54,851 submissions through fax or electronic means plus 23,507 mailed submissions).  The annual burden hours for the new services, allotted across all providers, would be 41,555 hours (.5 hours x 78,358 submissions plus 3 hours x 792 providers for education).  The annual burden cost would be $1,957,592 (41,555 hours x $44.28 plus $117,537 for mailing costs). The ICR approved under OMB control number 0938-1368 will be submitted to OMB for approval of this extension.

Annual Estimated Burden and Cost Table for the Prior Authorization Process and Requirements for Certain Hospital Outpatient Department (OPD) Services- Additional Botulinum Toxin Injection New Services 

Activity
Responses Per Year
(i.e. number of reviewed claims)
Time Per Response (hours) or Dollar Cost
Total Burden Per Year (hours)
Total Burden Costs Per Year Using Loaded Rate
Fax and Electronic Submitted Requests- Initial Submissions
41,299
0.5
20,649
$914,351
Fax and Electronic Submitted Requests-Resubmissions
13,552
0.5
6,776
$300,041
Mailed in Requests- Initial Submissions
17,699
0.5
8,850
$391,865
Mailed in Requests- Resubmissions
5,808
0.5
2,904
$128,589
Mailing Costs
23,507
5
 
$117,537
Provider Demonstration- Education
792
3
2,376
$105,209
Total
 
 
41,555
$1,957,592
    13. Capital Costs
There are no capital costs associated with this collection.
    14. Costs to Federal Government
The annual estimate for the costs associated with performing prior authorization reviews for the additional Botulinum Toxin Injection services is approximately $7.6 million. The average annual cost for the existing eight service categories and the new additional services is $57.8 million.
    15. Changes in Burden
The burden hours and costs have increased due to the addition of the new services.  The burden hours have increased from 316,413 hours stated in the CY 2023 OPPS/ASC final rule for the current services to 357,968 with the addition of the new Botulinum Toxin Injection services.  The burden cost has increased from $12.6 million for the current eight service categories to $16.4 million with the inclusion of the new services.


2027 List of Additional Outpatient Department Services That Require Prior Authorization

 Beginning for service dates on or after July 1, 2027
Code
Botulinum Toxin Injections
64611
Chemodenervation of parotid and submandibular salivary glands, bilateral
64616
Chemodenervation of muscle(s); neck muscle(s), excluding muscles of the larynx, unilateral (eg, for cervical dystonia, spasmodic torticollis)
64617
Chemodenervation of muscle(s); larynx, unilateral, percutaneous (eg, for spasmodic dysphonia), includes guidance by needle electromyography, when performed
64642
Chemodenervation of one extremity; 1-4 muscle(s)

64644
Chemodenervation of one extremity; 5 or more muscles
64646
Chemodenervation of trunk muscle(s); 1-5 muscle(s)
64647
Chemodenervation of trunk muscle(s); 6 or more muscles
J0589
Injection, daxibotulinumtoxina-lanm, 1 unit

    16. Publication or Tabulation
 There are no plans to publish or tabulate the information collected due to this information being confidential.  CMS will periodically publish summary level information on the demonstration such as the number of prior authorization requests submitted, number of requests affirmed, number of requests non-affirmed, etc.

    17.  Expiration Date
 There are no instruments for this PRA package.  The expiration date can be found on the OMB website.