On July 13^th, 2023, the Centers for Medicare and Medicaid Services (CMS) proposed to rescind the Appropriate Use Criteria (AUC) rules and policy. While CMS technically calls this a “pause,” the commentary surrounding their decision to rescind the AUC policy indicates that they do not believe they can implement the law as written.

It is important to note that CMS could still change their proposal based upon comments and until the final rule comes out, the AUC rules remain in effect.

In the proposed rule, CMS writes that “we have exhausted all reasonable options for fully operationalizing the AUC program consistent with the statutory provisions…As a result we propose to pause implementation of the AUC program for reevaluation and rescind the current AUC program regulations from § 414.94. We expect this to be a hard pause to facilitate thorough program reevaluation and, as such, we are not proposing a time frame within which implementation efforts may recommence.”

Of course, CMS does not have the authority to simply refuse to implement the law, so their rulemaking language must leave open the ever-so-slight possibility of returning to implement the policy at some point in the future.

As we know, the claims-based reporting requirements of the program, which are required by the underlying statute, have been the hardest aspect of AUC for CMS to implement. In this rule, CMS writes that they “considered many rounds of input from interested parties, [such as AHRA] including internal and external experts, and diligent exploration of options, we have come to believe that the real-time claim-based reporting requirement prescribed by section 1834(q)(4)(B) of the Act presents an insurmountable barrier for CMS to fully operationalize the AUC program.”

CMS also proposes to end the educational and operations testing period as they argue that there is “no utility” to testing a program that does not have “a way forward.”

Not too long ago, CMS looked like they were going to push forward with this policy. In the 2022 rulemaking cycle, they identified and created policies to address nine niche and specific claims-processing issues. The progress in the 2022 final rule was so significant that in a summary for AHRA I wrote “CMS does appear ready to operationalize the payment penalty phase of AUC.” Clearly, I was wrong in my assessment.

In my defense, I think it is fair to say that CMS was close to solving the claims reporting issues but ultimately program integrity concerns coupled with CMS’s clear (and laudable) desire to ensure that no advanced imaging claims were inappropriately denied, forced CMS to indefinitely delay the AUC program in July of 2022. Once the indefinite delay was announced, it seemed increasingly likely that the only way forward would be for Congress to get involved and amend the statute. This proposed rule effectively confirms that unless and until the law is amended, the AUC policy is on, to use CMS’s term, a “hard pause.”

Speaking of Congress, the appetite on Capitol Hill to revise the policy is currently unclear. Certainly many of the legislative staff that were involved in the passage of the 2014 law, have since moved to new positions and thus the institutional knowledge of this policy on the Hill is limited. Nevertheless, The American College of Radiology, in their preliminary summary of the rule, noted that “The College is working with Congress to streamline and modernize the PAMA AUC program, including the removal of [the real-time claim-based reporting] requirement, to allow the program to move forward…”

One glimmer of hope for those who want to pass reforms to save the AUC program is the fact that CMS estimated that Medicare would save $700 million annually from a decrease in unnecessary imaging utilization. Policies that save money are always intriguing to lawmakers because they can be used to “pay for” other policies that cost money. Perhaps the cost-savings from AUC will motivate Congress to revive the idea, but there will likely also be opposition to efforts to save AUC from referring providers who don’t like the administrative burden of having to consult appropriate use criteria before ordering advanced imaging.

While this very long chapter of the AUC policy is now closed, the underlying concerns about what drives prior authorization decisions remain. The search continues for an administratively feasible policy which ensures that appropriate imaging decisions are based on primarily clinical decisions, not financial ones. This particular chapter may be closed but it is not the end of the story.