Tuesday, January 5, 2016

CMS Creates Prior Authorization Process for DMEPOS Items

Dan Ciolek

On December 30, 2015 the Centers for Medicare & Medicaid Services (CMS) issued a final rule that establishes a prior authorization process for certain high-cost durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) items that are frequently subject to unnecessary utilization. This includes items with an average purchase fee of $1,000 or greater, or an average rental fee schedule of $100 or greater.

This prior authorization process, which becomes effective February 29, 2016, will help ensure that certain DMEPOS items are provided consistent with Medicare coverage, coding, and payment rules. CMS has had longstanding concerns about the improper payments related to DMEPOS items. The Department of Health and Human Services’ Office of the Inspector General and the U.S. Government Accountability Office have published multiple reports indicating questionable billing practices by suppliers, inappropriate Medicare payments, and questionable utilization of DMEPOS items. CMS believes the final rule will prevent unnecessary utilization while safeguarding beneficiaries’ access to medically necessary care.

AHCA members should pay attention to this policy as it may change when and how clinical and billing staff may need to submit required documentation to physicians, suppliers and Medicare to assure that beneficiaries are able to receive necessary high cost DMEPOS items in a timely manner, and that the documentation supports payment. For example, the Medicare Claims Processing Manual , Chapter 20, Section 100.2.2 indicates that treating therapists can complete Section B of Certificate of Medical Necessity Forms submitted to a supplier by the certifying physician. With the new prior authorization process, treating SNF therapists that currently complete this section for their patients, or provide other clinical documentation to the certifying physician, may be asked to do it sooner in the process.

The final rule does not change coverage policy. However, the prior authorization process will require the information necessary to support Medicare payment to be submitted before the item is furnished to the beneficiary and before the claim is submitted for payment to assure that all relevant coverage, coding, and clinical documentation requirements are met. This helps ensure that beneficiaries are not held responsible for the cost of items that are not eligible for Medicare payment. Access is preserved in this rule by having both specified time frames for review and approval of requests, and an expedited process in cases where delays jeopardize the health of beneficiaries.

Under Section 1834(a)(15) of the Social Security Act, the Secretary has the authority to develop and periodically update a list of DMEPOS items that are frequently billed improperly and to develop a prior authorization process for these items. The final rule implements this authority by creating: 1) a “Master List” of items that meet specific criteria and are potentially subject to prior authorization; 2) a “Required Prior Authorization List,” 3) a subset of items on the Master List; and 4) a prior authorization program for the Required Prior Authorization List items.

Prior authorization will be required for those DMEPOS items on the Required Prior Authorization List. The process requires all relevant documentation to be submitted for review prior to furnishing the item to the beneficiary and submitting the claim for processing. CMS or its contractors will review the prior authorization request and provide a provisional affirmation or non-affirmation decision. A claim submitted with a provisional affirmation decision will be paid so long as all other requirements are met. A claim submitted with a non-affirmation decision or without a decision will be denied. Unlimited resubmissions of prior authorization requests are allowed.

Medicare or its review contractor will make a reasonable effort to render an initial prior authorization determination within 10 business days and will make a reasonable effort to render a resubmission prior authorization determination within 20 business days. These are maximum time frames and will be adjusted downward for items that require less time for making a determination. An expedited review process will be available to address circumstances where applying the standard time frame for making a prior authorization decision could seriously jeopardize the life or health of the beneficiary. The request for an expedited review must provide rationale supporting the request.

CMS will issue specific prior authorization guidance in subregulatory communications including at the CMS Prior Authorization Initiatives DMEPOS web page.

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