PACS Regulatory Framework & Requirements 3 — Questions and Answers
Question 1: A Medicaid managed care organization denies a prior authorization request. Under 42 CFR Part 438, within how many calendar days must the enrollee receive written notice of the denial?
- 5 calendar days
- 14 calendar days (Correct answer)
- 10 calendar days
- 30 calendar days
Correct answer: 14 calendar days
Under 42 CFR Part 438.404, Medicaid managed care organizations must provide written notice of an adverse action, including a PA denial, within 14 calendar days.
Question 2: Which provision of the Affordable Care Act requires non-grandfathered health plans to cover certain preventive services without prior authorization or cost-sharing?
- Section 2713 (Correct answer)
- Section 1557
- Section 2719
- Section 1302
Correct answer: Section 2713
ACA Section 2713 requires non-grandfathered health plans to cover USPSTF A/B-rated preventive services without cost-sharing or prior authorization requirements.
Question 3: When a Medicare Advantage plan denies a prior authorization as not medically necessary, the denial notice must inform beneficiaries of their right to request a(n):
- Administrative Law Judge hearing only
- Organization Determination and subsequent appeals (Correct answer)
- State insurance department complaint only
- Congressional ombudsman review
Correct answer: Organization Determination and subsequent appeals
MA plan PA denials constitute organization determinations, and enrollees must be notified of their right to appeal through reconsideration, ALJ, MAC, and judicial review.
Question 4: Under HIPAA's Administrative Simplification provisions, what is the standard electronic transaction code set used for prior authorization requests?
- ASC X12 278 (Correct answer)
- ASC X12 837
- HL7 FHIR R4
- ASC X12 835
Correct answer: ASC X12 278
The ASC X12 278 Health Care Services Review transaction is the HIPAA-mandated standard for electronic prior authorization requests and responses.
Question 5: A health plan uses clinical criteria developed by a nationally recognized organization to make PA decisions. This practice is most closely aligned with which regulatory requirement?
- Using evidence-based criteria per URAC and NCQA standards (Correct answer)
- Complying with state mandated benefit laws
- Following CMS Medicare coverage determinations
- Adhering to FDA drug approval labeling
Correct answer: Using evidence-based criteria per URAC and NCQA standards
URAC and NCQA accreditation standards require health plans to use evidence-based, nationally recognized clinical criteria (such as MCG or InterQual) for utilization management decisions.
Question 6: Which federal regulation specifically prohibits a Medicare Part D plan from requiring prior authorization for opioid prescriptions that comply with the plan's established thresholds as part of its safe-guarding program?
- No such prohibition exists; Part D plans may require PA for any drug
- 42 CFR 423.153 limits PA to safety edits, not routine formulary management (Correct answer)
- 45 CFR Part 164 restricts PA for controlled substances
- CMS guidance mandates PA for all Schedule II opioids
Correct answer: 42 CFR 423.153 limits PA to safety edits, not routine formulary management
42 CFR 423.153 governs drug utilization management for Part D plans and restricts how safety-based PA edits for opioids must be structured and applied.
Question 7: When a state passes a law requiring insurers to honor prior authorizations approved by a previous plan for a set continuity-of-care period, this is known as a:
- Carve-out provision
- Continuity of care or transition of care requirement (Correct answer)
- Coordination of benefits mandate
- Step therapy exemption law
Correct answer: Continuity of care or transition of care requirement
Continuity of care laws require health plans to honor previously approved PA decisions during transition periods when a patient changes plans, ensuring uninterrupted treatment.
PACS Regulatory Framework & Requirements 3
A Medicaid managed care organization denies a prior authorization request.
Under 42 CFR Part 438, within how many calendar days must the enrollee receive written notice of the denial?