CMS DME Prior Authorization Proposal Causes Concerns for Providers, Beneficiaries

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By Mindy Yochelson

Aug. 14 - Health-care providers and others are urging the Centers for Medicare & Medicaid Services to proceed cautiously in developing a Medicare prior authorization process for durable medical equipment (DME).

The American College of Physicians (ACP) said it was concerned that doctors could be subject to an "increase in administrative burden" and that beneficiaries could experience delays in getting necessary medical services or items, particularly when discharged from inpatient care.

Two beneficiary advocacy groups said the reliance on a single mention in one of three sources "risks over inclusion" of items targeted for prior authorization.

Although the ACP said it supports the agency's objectives of ensuring access to care and protecting Medicare funds, the group, like other commenters, suggested some changes to the proposal that would be focused on a list of items targeted for prior authorization due to a history of "unnecessary utilization."

The CMS in May proposed the prior authorization process for certain durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) items and asked for comments on the list, called the Proposed Master List of DMEPOS Items Subject to Frequent Unnecessary Utilization for Prior Authorization.

The ACP and others had until July 28 to comment.

Congress's Medicare advisers were among the earlier commenters. The Medicare Payment Advisory Commission June 9 said prior authorization requirements "would be a step forward on curbing unnecessary volume" in services.

The commission said the CMS had claimed that its seven-state power mobility demonstration (PMD) prior authorization demonstration has shown some early success in reducing spending.

In its proposal, the agency noted that it wouldn't require prior authorization for PMDs, at least until the demonstration was complete.

Criteria for Inclusion

For other items, criteria for appearing on the master list include having an average purchase fee of $1,000 or greater or an average rental fee schedule of at least $100.

"This threshold would allow us to focus our limited resources on items for which prior authorization will result in the largest potential savings for the Medicare Trust Fund," the proposal said.

The item also would need to have been:

• identified in a Government Accountability Office or a Department of Health and Human Services Office of Inspector General report that is national in scope and published in 2007 or later, as having a high rate of fraud or unnecessary utilization, or

• listed in the 2011 or later Comprehensive Error Rate Testing (CERT) program's Annual Medicare FFS [fee-for-service] Improper Payment Rate Report DME Service Specific Overpayment Rate Appendix, which describes the incidence and rates of improper payments and the common causes of these errors.

The ACP recommended that because physicians are often unaware of the price of items, the CMS should provide information to the clinician and the beneficiary at the time of ordering to help determine, among other things, "whether an alternative is available which may be less costly."

Time on Master List

The items chosen would remain on the master list for 10 years. The CMS said that particular time period "without a finding that the item has a potentially high rate of fraud, unnecessary utilization or aberrant or improper billing makes the original placement no longer current."

However, another provider group, the Association for the Advancement of Wound Care (AAWC), called the 10-year time-frame "entirely unreasonable."

Instead, the group said, inclusion on the list should be limited to 18-24 months "after which a full analysis needs to be conducted taking into account" such factors as the impact of delays in patient discharge from facilities to home and the cost of that to Medicare.

Despite the inclusion of the large master list in the proposal, the agency said it plans to first "implement prior authorization for a subset of items," and asked for comments on the number of items to be selected for initial implementation.

The American Osteopathic Association (AOA) asked that the subset of items be subject to physician society input before finalized.

Two beneficiary groups also expressed concern about the subset of items and urged a system where "placement and retention" of items be "subject to both public input and challenge."

The groups-the Medicare Rights Center and the Center for Medicare Advocacy-said that the CMS's "dependence on a single mention in one" of the three sources-the GAO, HHS OIG, and CERT-"risks overinclusion" of list items.

Decision Response Time

The AOA also said it worries that beneficiaries would be forced to wait an unreasonable amount of time to receive medically necessary items and asked that a 10-day deadline for communication about a prior authorization request be cut by more than a third.

The American Osteopathic Association asked that a 10-day deadline for communication about a prior authorization request be cut by more than a third.

The CMS had recommended that Medicare contractors make a reasonable effort to render a decision about whether an item is "affirmed or non-affirmed" within 10 days of receiving the initial request, two days for an expedited request or 20 days for a resubmission.

A non-affirmation means that Medicare believes that a future claim associated with the prior authorization request would be denied. Requestors would be able to resubmit a prior authorization request.

The AOA urged the CMS to reduce the contractor response deadline from 10 days to a maximum of three days for routine items and 24 hours for the expedited items.

Insurer WellPoint also told the CMS that in the private sector, the approval time is a maximum of three days.

Supplier Reaction

The American Association for Homecare told the CMS that revisions must be put in place to win the group's support.

Those included completing prior authorization decisions within 24 hours, requiring communication to be electronic and free of charge and requiring that contractors' decisions "include options and accessories provided in addition to the base equipment."

The CMS said the proposed prior authorization process wouldn't create new clinical documentation requirements. Instead, it would require the same information necessary to support Medicare payment, just earlier in the process.

However, the AAHomecare took exception to the CMS's estimate of a completion time of 30 minutes per prior authorization request. Although the supplier organization didn't suggest a different time, it called the timing a "gross underestimation of the time it takes to collect and prepare the documentation."

Impact on Beneficiaries

The two beneficiary advocacy groups saw positive and negative in the proposal.

The Medicare Rights Center said the proposed system would be superior to the current situation in which a beneficiary "has no right to a written reason, or to appeal or review of the supplier's decision not to provide" an item.

Providers don't want to provide costly equipment if they believe Medicare may not pay, the Center for Medicare Advocacy said. So for some beneficiaries, the proposal could increase their access to high-cost items if suppliers are confident that Medicare will cover the item.

The two groups, however, recommended that the CMS look to others for an opinion when an item isn't affirmed. The CMA said that when there is a "nonaffirmed" prior authorization decision, it could "perpetuate and exacerbate barriers faced by beneficiaries."

In those situations, an independent review system for nonaffirmed items would be appropriate, the two groups said.

 To contact the reporter on this story: Mindy Yochelson in Washington at

To contact the editor responsible for this story: Ward Pimley at

The proposal is at .