Guardrails on retrospective clawbacks

(a) Application of prompt payment requirements to all claims for which authorization was provided Section 1857(f) of the Social Security Act (42 U.S.C. 1395w–27(f)) is amended— (1) in paragraph (1)— (A) in the header, by inserting for items and services furnished by out-of-network providers of services and suppliers after requirement; and (B) by striking A contract and inserting Subject to paragraph (2), a contract; (2) in paragraph (2), by striking in compliance with paragraph (1) and inserting in compliance with paragraphs (1) and (2); (3) by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively; and (4) by inserting after paragraph (1) the following new paragraph: (2) Requirement for items and services for which authorization was provided (A) In general For contract years beginning on or after January 1, 2028, a contract under this part shall require a Medicare Advantage organization to provide prompt payment (consistent with the provisions of sections 1816(c)(2) and 1842(c)(2)) of qualifying claims submitted for authorized items and services (as defined in subparagraph (B)) furnished to enrollees under the plan, except that in applying the provisions of such sections— (i) references to not less than 95 percent of all claims submitted shall be treated as references to 100 percent of all claims submitted; and (ii) every qualifying claim (as described in subparagraph (C)) submitted for an authorized item or service shall be deemed to be a clean claim referred to in such sections. (B) Authorized item or service defined For purposes of this paragraph, the term authorized item or service means an item or service— (i) that is furnished by a provider of service or supplier to an individual enrolled in a Medicare Advantage plan offered by a Medicare Advantage organization; and (ii) for which approval was provided by the Medicare Advantage organization through a specified authorization (as defined in section 1852(g)(1)(C)(iii)). (C) Qualifying claim described For purposes of this paragraph, a claim for an authorized item or service is a qualifying claim if it includes information sufficient to establish that approval for such item or service was provided as described in subparagraph (B)(ii).. (b) Effect of specified authorizations Section 1857(e) of the Social Security Act (42 U.S.C. 1395w–27(e)) is amended by adding at the end the following new paragraph: (7) Effect of specified authorizations Beginning with plan years beginning on or after January 1, 2028, a contract under this section with an MA organization shall require that, in the case that the MA organization approves the furnishing to an individual enrolled under an MA plan offered by such MA organization of an item or service through a specified authorization (as defined in section 1852(g)(1)(C)(iii)) made during the receipt by the individual of such item or service— (A) the MA organization may not, after such approval, deny coverage of such item or service on the basis of lack of medical necessity and may not reopen such a decision for any reason except for good cause (as described in sections 405.986 and 422.616 of title 42, Code of Federal Regulations (or any successor regulation)) or if there is reliable evidence of fraud or similar fault (as such terms are defined in section 405.902 of such title (or any successor regulation)), as determined in accordance with section 422.616 of such title (or any successor regulation); and (B) the MA organization may not, after such approval, change the code assigned with respect to the claim for such item or service such that the amount of payment for such claim would be reduced, except for good cause (as described in subparagraph (A)) or if there is reliable evidence of fraud or similar fault (as so described).. (c) Limitation on use of third-Party post-Claim review entities Section 1852(g) of the Social Security Act (42 U.S.C. 1395w–22(g)) is amended by adding at the end the following new paragraph: (6) Limitations on use of third-party reviews (A) In general For contract years beginning on or after January 1, 2028, procedures established by a Medicare Advantage organization for making determinations under paragraph (1), reconsiderations under paragraph (2), or expedited determinations or reconsiderations under paragraph (3), and procedures established for providing for any post-payment review process shall— (i) prohibit any third-party entity from conducting a medical necessity review for coverage, payment, or post-payment review for such Medicare Advantage organization unless— (I) such review is not with respect to an authorized item or service (as defined in section 1857(f)(2)(B)); and (II) such entity is in compliance with the requirements described in subparagraph (B); (ii) prohibit the use of any third-party review that is conducted using a routine, automated process for denials in any such review, claim denials, or pattern-based practices of changing a code assigned with respect to a claim for an item or service furnished to individuals enrolled under an MA plan offered by the Medicare Advantage organization to a code that would result in a reduction in the amount of payment for such claim after the item or service has been furnished to the individual; and (iii) prohibit any compensation arrangement with any third-party entity that provides for payment or other compensation to such entity based on the number, percentage, or amount of specified authorization requests (as defined in section 1852(g)(1)(C)(iii)) that the entity approves, denies, or otherwise recommends for approval or denial. (B) Requirements For purposes of subparagraph (A), the requirements specified in this subparagraph, with respect to a third-party entity and a review described in such subparagraph, are each of the following: (i) The entity conducts such review in accordance with audit protocols and appeal rights, as applicable, that are specified by the Secretary. (ii) The entity complies with audit and public transparency reporting requirements specified by the Secretary..