CMS has issued a final rule that would establish a prior authorization process for certain DME items that the agency says are “frequently subject to unnecessary utilization.”
Under the final rule, the prior authorization process will require the same information necessary to support Medicare payment today, but instead it obtains the information earlier in the process. The prior authorization process aims to ensure that all relevant coverage, coding, and clinical documentation requirements are met before the item is furnished to the beneficiary and before the claim is submitted for payment.
CMS developed a “Master List” of 135 DMEPOS items that it says were identified as frequently subject to unnecessary utilization and are potentially subject to prior authorization. This includes items 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).
For inclusion in prior authorization, those Master List items also must be the subject of:
- HHS Office of the 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 Annual Medicare Fee-for-Service Improper Payment Report Durable Medical Equipment (DME and/or) Report’s DMEPOS Service Specific Reports.
The list updates annually, so that items that are on the DMEPOS Fee Schedule and meet the payment threshold are added to the list when the item is the subject of an OIG or GAO report of a national scope, or a future CERT DME Service Specific Report.
Items will remain on the list for 10 years, but can be removed sooner if the purchase amount drops below the payment threshold. After 10 years, items can remain on the list or be added back to the list if a subsequent report identifies the item as frequently subject to unnecessary utilization.
CMS noted that because a DME item is on the Master List that does not automatically create a prior authorization requirement for that item. In order to balance minimizing provider and supplier burden with protecting the Medicare Trust Funds and beneficiary access, CMS says it will initially implement prior authorization for a subset of items on the Master List (referred to as “Required Prior Authorization List”). CMS will publish the Required Prior Authorization List in the Federal Register with 60 days’ notice before implementation of prior authorization for those items.
The prior authorization 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. CMS says, unlimited resubmissions of prior authorization requests are allowed.
In terms of timing, CMS states that the regulations are effective Feb. 29.