Is the expansion of Medicare prior authorization actually good news for durable medical equipment (DME) suppliers?
The Centers for Medicare & Medicaid Services (CMS) has described prior authorization as a tool to reduce DME fraud, waste and abuse. Accordingly, CMS added eight codes to its Medicare prior authorization list, effective Oct. 28.
These codes are now under prior authorization: K0005 (ultralightweight manual wheelchair); E0194 (air fluidized bed); L1833 (knee orthosis, adjustable knee joints); L0456 (thoracic-lumbar-sacral orthosis, flexible, prefabricated item customized to fit a specific patient); L0457 (thoracic-lumbar-sacral orthosis, flexible, prefabricated, off the shelf); L0486 (thoracic-lumbar-sacral orthosis, triplanar control, includes carved plaster or CAD-CAM model, custom fabricated); L3761 (elbow orthosis); and L3916 (wrist hand orthosis).
That brings the total number of affected HCPCS codes to 82.
During an Oct. 27 industry outlook webinar, HME Business Editor-in-Chief Laurie Watanabe asked the policy panelists whether prior authorization — a bane to much of healthcare — could actually help DME suppliers.
Using ‘silver linings’ to suppliers’ advantage
“For prior authorization, there are some silver linings,” said Dan Fedor, director of reimbursement, VGM & Associates/U.S. Rehab. “For new product, especially expensive product, it is really good to have that reassurance that the patient meets the coverage criteria prior to ordering and delivering the product.”
Fedor specifically highlighted the K0005 ultralightweight manual wheelchair code now under prior authorization.
“I think having the K0005 moved to prior authorization as a condition of payment is a good thing,” he said. “One thing I see as a benefit is the turnaround time. [Prior to Oct. 28, 2026] it could be submitted to what’s known as Advanced Determination of Medicare Coverage, which is another form of prior authorization. But the turnaround time could take anywhere up to 30 days or so. So that’s a delay in delivery.”
But under prior authorization program rules, Fedor explained, “They’re talking about a five- to seven-business-day turnaround time. So that’s a big difference for someone that possibly is being discharged and needs the equipment immediately. I do see that as a huge benefit — as long as prior authorization remains with new product, and [CMS doesn’t] take it over to repairs on already established medically necessary product.”
DME’s perspective on prior authorization
“I completely agree with Dan,” said panelist Cara C. Bachenheimer, general counsel for the American Association for Homecare and a shareholder with Brown & Fortunato. “We’re the only sector in the healthcare industry that likes prior authorization, so it’s kind of an interesting take. It’s a big deal in the physician community: Everybody hates it. And when you talk to policymakers, they’re completely shocked that [our] industry has been advocating for more prior authorization just to get that assurance that the medical need and the documentation are sufficient.”
Bachenheimer called the expanded prior authorization “a huge step forward,” despite the “disconnect in D.C.”
“And to your point, Dan, given the criteria that CMS has established, I don’t see it being expanded to repairs,” she added. “They have set criteria that CMS has essentially provided themselves.”
Bachenheimer said CMS has focused on prior authorization for products that are at least somewhat expensive, and have been “under tight scrutiny for fraud, waste, and abuse.”
And she added that while past prior authorization expansions have made suppliers wonder if that’s good news or bad news, “After having a couple of months’ experience, people have been really positively reacting to the prior authorization program. Just go with it. For the MACs and Medicare auditors, you are essentially guaranteed that decision of medical need forever.”
The prior authorizations do not extend beyond the contractors controlled by Medicare, Bachenheimer said. “We’ve had those conversations with CMS because obviously, you don’t want someone else making a different decision on medical need. But we have found that that medical need determination does withstand later scrutiny, so that sort of underscores why it’s been a positive experience. You don’t have to stay up all night wondering whether or not that money is going to be recouped later on.”
Prior authorization requirements for new suppliers
Asked about additional prior authorization requirements affecting newly enrolled suppliers, Jamie Davis, Esq., CIPP/US, CCEP, owner of Cornerstone Medical Supply, said, “I’m always going to put on my compliance hat. So I tell people all the time: We’re going to use this as a free pre-audit. Think of it as that. Just know that this is helping the business. Yes, it’s another layer, but I think as long as you talk through the why, I think it’s important.”
Davis, an attorney, recommended starting a log for every prior authorization case. “With my clients, [I’m] letting them know that every decision basically is a reviewer grading your documentation before you deliver and as you continue.”
She added that suppliers who consistently achieve good prior authorization scores could qualify for CMS exemptions. “These are things that I talk with my clients about, and I really want them to understand the importance of prior authorization. It’s the inspection that you build before you buy. If you’re buying a business, understanding the business and understanding the compliance that goes on with the business — these are conversations that I’m having with people that are interested in buying, launching or opening up a new location. I think it’s really important.”
“For prior authorization for new suppliers: This may be obvious, but it’s been talked about at CMS for a while because a lot of the abusive practices that have happened by some of these bad actors,” Bachenheimer added. “And so, I think it’s important for people to generally support it. We don’t want bad actors polluting our industry. And it’s also helpful from a learning curve issue as well — to Jamie’s point about the compliance and documentation and making sure that’s all in order. There was a reason and a method to this particular policy proposal.”
“And it’s not a wall,” Davis said. “It’s part of the process.”
Editor’s Note: For more on prior authorization and other industry trends, register to watch and listen to the webinar for free, on demand.
