The Centers for Medicare & Medicaid Services (CMS) finalized a rule that establishes a prior authorization process for certain durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) that are “frequently subject to unnecessary utilization,” defined as the “furnishing of items that do not comply with one or more of Medicare’s coverage, coding, and payment rules.” It was published in the Federal Register on December 30. As part of the final rule, CMS created a Master List of 135 affected items, 84 of which are L-Codes that pertain to lower-limb prostheses and components. (See pg. 41 of the final rule for the Master List.)
The Master List will self-update annually. The criteria for inclusion on the list follows:
- The item appears on the DMEPOS Fee Schedule list and has a purchase fee of $1,000 or more, or an average rental fee schedule of $100 or more.
- The item has been identified in a U.S. Government Accountability Office or U.S. Department of Health and Human Services (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 (CERT) Annual Medicare Fee-for-Service (FFS) Improper Payment Rate Report Durable Medical Equipment (DME) and/or DMEPOS Service Specific Report(s) (referred to in the proposed rule as the Annual Medicare Fee for Service Improper Payment Rate Report Durable Medical Equipment Service Specific Overpayment Rate Appendix).
The final rule also clarifies that presence on the list does not automatically require prior authorization. Rather, CMS is initially implementing prior authorization on a subset of items, called the Required Prior Authorization List. CMS will inform the public of the Required Prior Authorization List in the Federal Register 60 days before implementation.
The prior authorization process does not create new clinical documentation requirements; it requires the same information necessary to support Medicare payment, just earlier in the process. CMS or its contractors will make “reasonable efforts” to communicate the decision. There is also an expedited process if a delay would “seriously jeopardize the life or health of the beneficiary.”
A provisional affirmation prior authorization decision is a condition of payment. A prior authorization decision is not a payment decision, and thus a prior authorization decision is not appealable. However, prior authorizations requests can be submitted an unlimited number of times.