CMS Announces Additions to Process Of Prior Authorization for DME, Services

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By Mindy Yochelson  

May 28 — The Centers for Medicare & Medicaid Services May 28 proposed to expand a Medicare demonstration that requires prior authorization for power mobility devices and to add similar requirements for two services that the agency views as frequently subject to unnecessary utilization (79 Fed. Reg. 30,511).

CMS said in the notice, which was published in the May 28 Federal Register (CMS-6050-P; RIN 0938-AR85), that it will launch two payment model demonstrations this fall to test prior authorization in the use of hyperbaric oxygen therapy and repetitive scheduled nonemergency ambulance transport.

The model for oxygen therapy will be implemented in New Jersey, Illinois and Michigan. The model for “non-emergent” ambulance transport will take place in New Jersey, Pennsylvania and South Carolina.

The states were selected “because of their high utilization and improper payment rates for these services,” the agency said.

Comments on the entire proposal will be accepted until July 28. The proposal was released for public inspection May 22.

CMS: No Service Delays

In defense of the process, the CMS said that prior authorization doesn't delay medical service but just “requires the same information that is currently necessary to support Medicare payment, but earlier in the process.”

It “allows providers and suppliers to address issues with claims prior to rending services and to avoid an appeal process,” the agency said.

For mobility devices, the CMS's Medicare Prior Authorization for Power Mobility Device (PMD) Demonstration began in 2012 in seven states: California, Florida, Illinois, Michigan, New York, North Carolina and Texas.

12 Additional States

The proposed rule would expand the demonstration to 12 additional states: Arizona, Georgia, Indiana, Kentucky, Louisiana, Maryland, Missouri, New Jersey, Ohio, Pennsylvania, Tennessee and Washington.

The agency said in a statement that it “seeks to build upon the lessons learned and leverage the success” of the program.

“Based on September 2013 claims data, monthly expenditures for certain power mobility devices decreased from $12 million in September 2012 to $4 million in August 2013 across the seven demonstration states,” the CMS said.

The proposed rule is estimated to reduce Medicare spending by $100 million to $740 million over the next 10 years, the agency said.

Criteria for Master List

The CMS is also soliciting comments on establishing criteria for a master list of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) items “that are frequently subject to unnecessary utilization and may be subject to prior authorization based on a history of improper payment.”

A master list proposed in the rule includes such items as continuous airway pressure devices, various power wheelchairs and powered air flotation beds.

The American Association for Homecare, which represents suppliers, manufacturers and others in DME industry, expressed initial concern about some of the provisions, including the length of time that the CMS and its contractors would have to complete the process.

“Even a two-day expedited process will not work for equipment needed for a hospital discharge,” AAHomecare's Vice President of Regulatory Affairs Kim Brummett said.

To contact the reporter on this story: Mindy Yochelson in Washington at myochelson@bna.com

To contact the editor responsible for this story: Ward Pimley at wpimley@bna.com

The proposed rule is at http://www.gpo.gov/fdsys/pkg/FR-2014-05-28/pdf/2014-12245.pdf.

A fact sheet on oxygen is at http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2014-Fact-sheets-items/2014-05-22-2.html.

A fact sheet on ambulance transport is at http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2014-Fact-sheets-items/2014-05-22-3.html.