The Centers for Medicare & Medicaid Services (CMS) today issued a final rule that would establish a prior authorization process for certain durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) items that are frequently subject to unnecessary utilization. This prior authorization process will help ensure that certain DMEPOS items are provided consistent with Medicare coverage, coding, and payment rules.  CMS believes the final rule will prevent unnecessary utilization while safeguarding beneficiaries’ access to medically necessary care.

Under the final rule, the prior authorization process will require the same information necessary to support Medicare payment today, just earlier in the process.  It will not create new clinical documentation requirements. The prior authorization process assures 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. This helps ensure that beneficiaries are not held responsible for the cost of items that are not eligible for Medicare payment. CMS believes prior authorization is an effective way to reduce or prevent questionable billing practices and improper payments for DMEPOS items.  Access is preserved in this rule by having both specified timeframes for review and approval of requests, and an expedited process in cases where delays jeopardize the health of beneficiaries.

The Master List is the set of 135 DMEPOS items identified as being frequently subject to unnecessary utilization.  Items that meet the following criteria are included on the Master List and thus potentially subject to prior authorization: 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) and 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 is self-updating annually such that items on the DMEPOS Fee Schedule that 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

Prior authorization will be required for those DMEPOS items on the Required Prior Authorization List.  The 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.  Unlimited resubmissions of prior authorization requests are allowed.

Medicare or its review contractor will make a reasonable effort to render an initial prior authorization determination within 10 business days and will make a reasonable effort to render a resubmission prior authorization determination within 20 business days.  These are maximum timeframes and will be adjusted downward for items that require less time for making a determination.  An expedited review process will be available to address circumstances where applying the standard timeframe for making a prior authorization decision could seriously jeopardize the life or health of the beneficiary. The request for an expedited review must provide rationale supporting the request.