On May 22, 2014, CMS published a proposed rule entitled “Medicare Program; Prior Authorization Process for Certain Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Items.”  The purpose of this rule is to establish a prior authorization process for DMEPOS items most frequently subject to unnecessary utilization, and also to clarify that contractors’ decisions regarding prior authorization of coverage of DMEPOS items are not initial determinations, and therefore not appealable.
CMS proposes to define “unnecessary utilization” as “the furnishing of items that do not comply with one or more of Medicare’s coverage, coding and payment rules, as applicable.”  CMS proposes to establish which items are frequently subject to unnecessary utilization through “prior payment experience,” including as reported in the Comprehensive Error Rate Testing (CERT) program reports.

According to the proposed rule, a requester for prior authorization would submit evidence that the item complies with all coverage, coding, and payment rules prior to furnishing the item and prior to submitting the claim for processing.  CMS or its contractors would review the prior authorization request to determine whether the item complies with applicable coverage, coding, and payment rules.  After receipt of all applicable required Medicare documentation, CMS or its contractors would conduct a medical review to determine whether to provisionally affirm or non-affirm the request.

A prior authorization request that is non-affirmed under section 1834(a)(15) of the Social Security Act is not an initial determination on a claim for payment for items furnished, and therefore would not be appealable.  CMS proposes to make this distinction clear by adding a new paragraph (t) to § 405.926 stating that a contractor’s prior determination of coverage is not an initial determination.  Also, claims receiving a non-affirmative decision, as well as claims for items subject to prior authorization but for which no prior authorization was requested, would be denied if submitted for processing, according to the proposed rule.

CMS seeks comment on the: (1) number of items selected for initial implementation; (2) number of future items selected for implementation; and (3) frequency in which CMS would select the items.

Read the proposed rule.

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