Medicare Establishes Prior Authorization Process for Certain DMEPOS

The Centers for Medicare & Medicaid Services (CMS) issued a final rule on Dec. 21, 2016, establishing a prior authorization process as a condition of payment for certain durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) beyond power mobility devices (PMDs). The new process will use a “Master List” of items that meet specific criteria and are potentially subject to prior authorization.

The Master List

The Master List includes 135 DMEPOS identified as being frequently subject to unnecessary utilization. Items potentially subject to prior authorization include those on the DMEPOS Fee Schedule with an average purchase fee of $1,000 or greater, or an average rental fee schedule of $100 or greater (adjusted annually for inflation), and the subject of:

• Office of Inspector General (OIG) or U.S. Government Accountability Office (GAO) reports that are national in scope and published since 2007; or
• Comprehensive Error Rate Testing Program Annual Medicare Fee-for-Service Improper Payment Rate Reports and/or the Supplementary Appendices for the Medicare Fee-for-Service Improper Payment Rate Reports since 2011.

Items will remain on the Master List for 10 years, but may be removed sooner if the purchase amount drops below the payment threshold. Items identified as frequently subject to unnecessary utilization may remain on the list beyond 10 years, or may be added back to the list.

Required Prior Authorization List

Items that appear on the Master List do not automatically require prior authorization. CMS will initially implement prior authorization for a subset of items on the Master List, referred to as “Required Prior Authorization List.” Prior authorization will be required for those DMEPOS items on the Required Prior Authorization List. CMS will publish the Required Prior Authorization List in the Federal Register with at least 60 days’ notice before implementation of prior authorization for those items.

Prior Authorization Process

The same information necessary to support Medicare payment today will be required for items that require prior authorization, just earlier in the process — this final rule does not create new clinical documentation requirements.
CMS will review prior authorization requests and provide a provisional affirmation or non-affirmation decision. A claim submitted with a provisional affirmation decision will be paid as 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 will be allowed.
Expect an initial prior authorization determination to take approximately 10 business days, and a resubmission prior authorization determination to take approximately 20 business days. Items that require less time for making a determination may receive a determination sooner. An expedited review process will be available in situations where the standard timeframe could seriously jeopardize the life or health of the patient. The request for an expedited review must provide supporting rationale.

New on the List

CMS is adding two types of power wheelchairs (K0856 Power wheelchair, group 3 std., single power option, sling/solid seat/back, patient weight capacity up to and including 300 pounds and K0861 Power wheelchair, group 3 std., multiple power option, sling/solid seat/back, patient weight capacity up to and including 300 pounds) to the Required Prior Authorization List. Beginning March 20, 2017, prior authorization for these PMDs will be a condition of payment in New York, Illinois, Missouri, and West Virginia. The requirement will expand nationwide in July 2017.

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