FINALIZED: Prior Authorization Process for Certain DMEPOS

Posted on in Billing/Reimbursement

Just in time for the New Year, the Final Rule has been released from CMS regarding the Prior Authorization (PA) Process for Certain DMEPOS. Under CMS-6050-F, this final rule establishes a PA process for those items that are subject to unnecessary utilization.  CMS defines unnecessary utilization as “furnishing items that do not comply with one or more of Medicare’s coverage, coding, and payment rules.”   They are further quoted as stating, “We believe a prior authorization process will ensure beneficiaries receive medically necessary care while minimizing the risk of improper payments, and will therefore protect both beneficiaries and the Medicare program.”

The following information comes straight from the final rule CMS-6050-F.  For 2014 CERT reported that approximately 5.1 billion dollars was improperly paid for DMEPOS items.  This represents a 53.1 percent improper payment rate for DMEPOS and represents 10.4 percent of the overall payment rate.  92 percent of DMEPOS improper payments were due to insufficient documentation.  Hence, the reason for a PA program

When will this become effective?  The effective date is 60 days after publication which means around the end of February 2016. This does apply to all Jurisdictions.

What are some of the common HCPCS codes out of 135 on the Master List?   E1390, E0260, E0601, E0470, E2402, E0277, and many L codes.  In addition some power wheelchairs codes that were only eligible for ADMC such as K0856 and K0861 to name a few. The complete range for power wheelchairs that will be eligible for PA is from K0813-K0864. For manual chairs the K0004 has been added to the PA list.

The Master List contains all 135 HCPCS codes that will remain on this list for 10 years.  CMS will select HCPCS codes from the Master List and put on what is called the Required PA List.  They do not indicate which codes will be on this Required PA List.  CMS will announce by the end of February which 135 HCPCS will be on the Required PA List. 

What are the outcomes of this program?  According to CMS, “The provider and supplier community will benefit from the increased education and outreach that is planned during year one of the PA program.”

What is the process for the PA?  Timeframes are not finalized yet in order to avoid barriers to care for beneficiaries.

However, here is the process that is in the initial proposed rule.   After receipt of all the applicable required documentation, a review would be conducted and a decision communicated that will affirm or non-affirm the request. 

  • A decision will be made within 10 days of receipt of all applicable information.
  • Two days for expedited request only be done if jeopardizing the life or health of the beneficiary which this needs to be in the documentation.
  • 20 days for resubmission and an unlimited amount of resubmissions.
  • No submission for a PA means a denial, but appeal rights are an option.
  • Even though an affirmation has been issued, there may still be a denial based on technical requirements that can only be evaluated after a claim is submitted for processing.

What should you as a supplier do now?

  • Review the final rule HERE and share with the entire company.
  • Make sure the medical policies (LCDs), related articles, and other rules are understood and still followed throughout.
  • Even though CMS has not announced the codes that will be on the Required PA List, we do know what codes are on the Master List, so be prepared.
  • AND stay tuned for more information as it’s released by CMS and the DME MACs and VGM.There are a lot of changes occurring in 2016, so make sure you are watching email updates as we will keep you informed as we receive information.

Questions? Contact the VGM Reimbursement Team.
Dan Fedor – 570-499-8459 – [email protected]
Ronda Buhrmester – 888-665-6518 – [email protected]