Two Demonstration Programs to Identify, Deny Improper Claims Postponed by CMS

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The Centers for Medicare & Medicaid Services Dec. 29 said it would postpone two demonstration projects intended to reduce improper payments and eliminate fraud, waste, and abuse.

The Prepayment Review and Prior Authorization for Power Mobility Devices demonstration, and the Recovery Audit Prepayment Review, scheduled to begin Jan. 1, were delayed indefinitely.

CMS in an announcement to providers said it “is carefully considering” the many comments and suggestions received. The programs were announced in November.

The power mobility program required a prior authorization process for Medicare beneficiaries who were prescribed a power wheelchair or scooter.

CMS had said the demonstration was intended to ensure that beneficiaries' medical condition warrants their medical equipment under existing coverage guidelines.

The recovery audit program is to authorize Recovery Audit Contractors (RACs) to review Part A claims that have high rates of improper payments before they are paid. The prepayment reviews were to focus on inpatient hospital claims involving short stays, which have had high rates of improper payments.

The demonstration was aimed at lowering the error rate by preventing improper payments rather than methods of looking for improper payments after they occur, CMS said.

The program, slated to run for three years, was to take place in 11 states—Florida, California, Michigan, Texas, New York, Louisiana, Illinois, Pennsylvania, Ohio, North Carolina, and Missouri.

Critics Say Program Would Ration Needed Items

The power mobility program had been fought by the industry and some in Congress.

The demonstration will serve to “ration medically necessary items and services to Medicare beneficiaries and will actually increase health care costs,” the American Association for Homecare said in a Dec. 8 statement.

“Studies show that beneficiaries with limited mobility who don't receive power wheelchairs require more medical treatment, additional skilled services and may even have to be admitted to expensive care facilities and nursing homes.”

A group of 22 House members wrote to CMS in mid-December asking the agency to stop the program.

The letter said that “taking a one-size fits all approach adds burdensome regulations to good-standing providers and threatens jobs.”

The three-year program was to take place in seven states—California, Texas, Florida, Michigan, Illinois, North Carolina, and New York—that have large populations of at-risk providers.

The seven states accounted for 43 percent of the $606 million that Medicare spent on power mobility devices in 2010, according to CMS.

“We are pleased that CMS has taken a deep breath to better understand the power mobility sector and the impact that any widespread prepayment review would have on Medicare beneficiaries and homecare providers,” Walt Gorski, AAHomecare, vice president of government affairs, said in a statement.

CMS said it will provide at least 30 days' notice before the demonstrations begin.