The Centers for Medicare & Medicaid Services (CMS) has issued a proposed rule that would establish a prior authorization process for certain durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) that are frequently subject to “unnecessary utilization.” About 90 L-Codes that pertain to lower-limb prostheses and components may be affected.
Section 1834(a)(15) of the Social Security Act authorizes the secretary of the U.S. Department of Health and Human Services (HHS) to develop and periodically update a list of DMEPOS that the secretary determines, on the basis of prior payment experience, are frequently subject to unnecessary utilization and to develop a prior authorization process for these items. The proposed rule will implement the authority. As part of the rule, CMS has created a proposed initial Master List. The two criteria for inclusion on the list, either of which must be met, are as follows:
- The item has been identified in a U.S. Government Accountability Office or HHS Office of Inspector General report that is national in scope and published in 2007 or later as having a high rate of fraud or unnecessary utilization.
- The item is listed in the 2011 or later Comprehensive Error Rate Testing program’s Annual Medicare Fee for Service Improper Payment Rate Report Durable Medical Equipment Service Specific Overpayment Rate Appendix.
CMS also proposes to include an item on the initial Master List if the item appears on the DMEPOS Fee Schedule list and has an average purchase fee of $1,000 or greater, or an average rental fee schedule of $100 or greater. The Master List will be self-updating annually, and items will typically remain on the Master List for ten years. However, presence on the list would not automatically require prior authorization, as a subset of items, called the Required Prior Authorization List, will be initially implemented.
The proposed prior authorization process would not create new clinical documentation requirements. Instead, it would require the same information necessary to support Medicare payment, just earlier in the process. CMS or its contractors would make “reasonable efforts” to communicate the decision within ten days of receipt of all applicable information, or within two business days if a delay would “seriously jeopardize the life or health of the beneficiary.”
If this proposed rule is finalized, prior authorization would become a condition of payment for the items on the Required Prior Authorization List. However, the rule will allow unlimited resubmissions. The proposed rule would also add a contractor’s decision regarding prior authorization of coverage of DMEPOS items to the list of actions that are not initial determinations and therefore not appealable.
CMS is accepting comments on the proposed rule for 60 days after the date of publication in the Federal Register. The rule is scheduled to be published in the Federal Register on May 28. Comments can be submitted electronically at www.regulations.gov
