What Happened?

If you receive certain botulinum toxin injections through Medicare hospital outpatient care, your provider will need to obtain prior authorization for services furnished on or after July 1, 2027. ​

The Department of Health and Human Services issued the final rule Nov. 6, according to a Legis1 review of the regulation.

That approval process is called Medicare prior authorization. The Centers for Medicare & Medicaid Services (CMS) is adding eight procedure codes to a category of services that has required prior authorization since July 1, 2020. The rule also establishes new Medicare payment rates that take effect Jan. 1, 2027:

  • Hospital rates: CMS says approximately 3,600 facilities paid under the hospital outpatient system will receive a 2.3% payment rate increase.
  • Surgery centers: Ambulatory surgical centers that meet quality reporting requirements will also receive a 2.3% payment rate increase.
  • 340B drugs: Medicare payments for drugs acquired through the 340B program will fall from the average sales price plus 6% to the average sales price minus 28%.
  • Payment offset: The annual reduction in non-drug payments will increase from 0.5% to 2%, which CMS estimates will reduce payments to affected providers by $1.6 billion in 2027.

Why Does it Matter to Me?

The additional injection codes represent approximately $102 million in annual Medicare payments, CMS says. Patients receiving these injections will face a new approval requirement before receiving covered hospital outpatient treatments, although qualifying providers may be exempt from the prior authorization process.

CMS reports that claims for the additional codes increased 42.8% from 2017 to 2024, from approximately 43,500 to 62,103. Overall hospital outpatient claims fell 8.3% during the same period.

Hospitals that enrolled in Medicare after Jan. 1, 2018, are excluded from the payment offset, and CMS declined to exempt safety-net, rural or teaching hospitals from the reduction.

Both Sides, Now

CMS says the expansion is intended to control unnecessary increases in the volume of covered outpatient services. Critics warn that additional prior authorization requirements could delay medically necessary treatment or cause unintended clinical consequences for patients receiving these injections. CMS sought comments on those risks.

For context, a Health and Human Services Office of Inspector General review published April 27, 2022, found that some Medicare Advantage denials of prior authorization requests delayed or prevented access to medically necessary care. That review examined Medicare Advantage generally, not botulinum toxin services.

CMS received 122 public comments on the expansion. Several commenters supported efforts to streamline prior authorization, while others warned that the requirements could delay treatment for patients with chronic neurological and other disabling conditions. Some questioned whether increased utilization demonstrated unnecessary care. CMS acknowledged that utilization growth alone does not establish that services are medically unnecessary or improperly billed.

On payments, CMS says most commenters opposed its proposed 3% reduction in non-drug payments, and many argued that the agency lacked authority to impose it. CMS finalized a 2% reduction instead, citing the financial burden. CMS says the 340B payment change implements an executive order titled "Lowering Drug Prices by Once Again Putting Americans First."

What Happens Next?

The payment offset will continue until estimated reductions reach $7.769 billion, which CMS projects will occur in 2031. CMS lists Jan. 4, 2027, as the deadline for comments on the final rule. Comments can be submitted through the Regulations.gov comment page under file code CMS-1850-FC.

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