A pre-authorization process for certain medical supplies has worked to bring down costs in sample studies and will help prevent questionable billing practices. That's the word from the Centers for Medicare and Medicaid Services, after issuing its final rule Tuesday establishing a prior authorization process for certain durable medical equipment, prosthetics, orthotics and supplies.
CMS has had longstanding concerns about the improper payments related to these items, the organization said.
The Department of Health and Human Services' Office of the Inspector General and the U.S. Government Accountability Office have published multiple reports indicating questionable billing practices by suppliers, inappropriate Medicare payments, and questionable use of durable medical equipment items, CMS said.
To minimize the provider and supplier burden, CMS will initially implement prior authorization for a subset of the 135 items on a master list of supplies.
Under the final rule, the prior authorization process will require the same information necessary to support Medicare payment as is currently required. It will just be done earlier in the process.
There are no 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, CMS said.
There is a specified timeframe for review and approval of requests, as well as an expedited process in cases where a delay could jeopardize the health of the beneficiary, CMS said.
It also said the organization has addressed concerns of unnecessary use and payment in recent years through the implementation of a competitive bidding program, as well as heightened screening of suppliers.
CMS recently expanded a three-year prior authorization demonstration program for power mobility devices. The demonstration began in 2012 in seven states with high incidences of fraudulent claims and improper payments. Monthly expenditures for power mobility devices decreased from $12 million to $3 million, CMS said.
In 2014, the demonstration was expanded to 12 additional states and the monthly expenditure dropped from $10 to $2 million.
Also, in those states that were not part of the demonstration, expenditures dropped from $10 to $3 million, according to CMS.
CMS believes the decrease in spending is due in part to national suppliers adjusting their billing practices nationwide to comply with CMS policies.
Items subject to prior authorization are those with an average purchase fee of $1,000 or more, or an average rental fee of $100 or more, and are the subject of Office of the Inspector General or U.S. Government Accountability Office, or other relevant entities.
Items will remain on the list for 10 years, but can be removed sooner if the purchase amount drops below the payment threshold. Items that are subject to unnecessary utilization can remain on the list or be added back.
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CMS will publish the required prior authorization list in the Federal Register with 60-days' notice before implementation of prior authorization for those items.
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 of prior authorization determination within 20 business days.
Twitter: @SusanJMorse