Hospital Outpatient Department (OPD) Prior Authorization Exemption Process

Hospital Outpatient Departments (OPDs) that demonstrate compliance with Medicare coverage, coding and payment rules related to prior authorization (PA) may be eligible for exemption. This exemption would remain in effect for a twelve-month period or until CMS elects to withdraw the exemption. To be eligible, OPDs need to submit at least ten prior authorization requests (PARs) during the standard review period and achieve a provisional affirmation compliance rate of at least 90 percent during an annual assessment. Notice of exemption or withdrawal from exemption will be provided at least 60 days prior to the effective date.

OPDs that do not qualify for exemption shall continue submitting PARs as usual. There will be continued assessment of an OPD’s compliance through their affirmation rates in October of each year. Exempt OPDs should not submit PARs during the exemption period. If you are a requestor submitting on behalf of the OPD and are unaware of the OPD’s exemption status, please contact the OPD and request a copy of the exemption notification letter. Continued evaluation of claim approval rate through Additional Documentation Requests (ADRs) will occur in August of each year. 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.

Annual Cycle Starting January 1

Quick Overview

Detailed Overview

Ten Claim Sample Additional Documentation Requests (ADR)
Exempt OPDs will receive an ADR for a ten claim post-pay sample on finalized claims with dates of service on or after January 1, through June 30. OPDs have 45 days to submit documentation. MACs will complete their review within 45 days of receipt of the requested documentation. OPDs that 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 still 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. Following the ten-claim sample review, OPDs will be notified whether they remain exempt or transition back to the standard review process of submitting PARs. PARs are required 60 days after the notification of withdrawal letter, which is the start of the standard cycle, (January 1). MACs will be prepared to start accepting PARs from providers that are being withdrawn from exemption on December 18. 

*Providers that do not have a minimum of ten finalized claims with dates of service on or after January 1, through June 30, will not participate in the ADR process and will be withdrawn from exemption.

Reference: OPD Operational Guide (PDF).

Prior Authorization Exemption Process Frequently Asked Questions (FAQ)

Q1: How many days’ notice will I receive before I switch from Prior Authorization Request (PAR) submissions to an exemption cycle?
A1: Medicare Administrative Contractors (MACs) will provide a 60-day notice prior to any transition period, continuation, or withdrawal from exemption.

Q2: I received a letter stating that I am starting exemption. What do I do now?
A2: PARs should not be submitted and will be rejected during the exemption cycle. Claims submitted while on exemption will not require a unique tracking number (UTN). Please follow the instructions in the exemption notification letter.

Q3: I received a letter stating I am now withdrawn from exemption. What do I do now?
A3: Providers may resume submitting PARs beginning December 18th. PARs will be required starting January 1. Your PAR affirmation rate will be monitored for the next exemption cycle.

Q4: Why are my PARs being rejected while on exemption?
A4: PARs are not required while a provider is on exemption, therefore any PAR submitted will be returned with a rejection decision. PARs should not be submitted for the purpose of obtaining a rejection letter for medical record keeping.

Q5: How do I bill PA claims without a UTN during the exemption period?
A5: PA services that were performed during the exemption period should follow the same billing practices used prior to the start of the exemption period. Applying previously used UTNs or invalid UTNs may delay processing of your claim. 

Q6: Towards the end of the exemption cycle, the MAC conducts a ten-claim post-payment review. How are the claims selected?
A6: The ten-claim sample is based on claim dates of service during the exemption period. This means that the claims selected will be from the timeframe in which you were exempt. 

Q7: Does the exemption process exempt providers from all OPD PA services?
A7: Yes. If you receive a notice of exemption, it applies to all services under the OPD PA program. 

Q8: If an exempt provider submits a PAR on 12/21 but it is non-affirmed, and the provider then becomes exempt on 01/01, does the provider need to resubmit the PAR? Will that resubmission reject if it is past the exempt start date?
A8: You do not need to resubmit if the procedure is performed after the start of the exemption period. If you do resubmit the PAR on or after 01/01, it will be rejected.

Q9: If I am an exempt provider, but during ADR review, it is determined that I no longer meet the requirements to remain exempt, when do I need to resume submitting PARs and begin adding a UTN to my claims?
A9: MACs will start accepting PARs from providers that are withdrawn from exemption on December 18. Claims with dates of service on or after January 1 require a UTN. 

Q10: What does it mean to opt-out of exemption?
A10: CMS has established a rule that allows providers to remain in the standard cycle and continue to submit PARs. Providers will receive a notice of exemption if they achieved a greater than 90% PAR affirmation rate. An opt-out form will be included with the exemption notification letter. The form must be submitted to the MAC by November 30th. Late requests will be rejected. 

Q11: What are ADRs?
A11: Additional Documentation Requests: ADRs are issued based on a specific claim submitted to your MAC. The ADR will specify the beneficiary and date of service and include a list of suggested documentation for a particular service to submit to your MAC that would support payment of your claim. 

Q12: How many claims will be selected for ADR review?
A12: Your MAC will randomly select ten post-payment claims for the ADR review.

Q13: What is the ADR timeline?
A13: The first ADR for exempt providers will be sent on August 1, 2022. The provider has 45 days to submit the documentation and the MAC has 45 days to review the documentation and make a determination. Notification of withdrawal will be sent out no later than November 2.