In 2015, CMS implemented a prior authorization process for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) items that are frequently used unnecessarily. The agency released an initial master list of 135 DMEPOS items subject to the new requirements on December 30, 2015, which met the following criteria:

• Are paid off the Medicare DMEPOS fee schedule (i.e. are not priced separately, or paid based on invoice price);
• Have an average purchase price of $1,000 or greater or an average monthly rental fee of $100 or more;
• Identified by the Government Accountability Office (GAO) or Department of Health and Human Services Office of the Inspector General (OIG) report (published in 2007 or later) as having a high rate of fraud or unnecessary utilization OR listed in the 2011 or later Comprehensive Error Rate Testing (CERT) program’s Annual Medicare Fee-for-Service Improper Payment Rate Report and/or the Supplementary Appendices for the Medicare Fee-for-Services Improper Payments Report.

Items will remain on the master list for 10 years, or sooner if the purchase price drops below the payment threshold.

Today, CMS is implementing prior approval requirements for the following two initial DMEPOS items from the master list:

• Power wheelchair, group 3 standard, single power option, sling/solid seat/back, patient weight capacity up to an including 300 pounds (HCPCS code K0856);
• Power wheelchair, group 3 standard, multiple power option, sling/solid seat/back, patient weight capacity up to and including 300 pounds (HCPCS code K0861).

The prior authorization requirements will be implemented in two phases due to the new complex claims processing systems changes required for implementation:

• Phase I (March 20, 2017): Prior authorization requirements will be limited to the following states: Illinois, Missouri, New York, and West Virginia (one state in each of the four DME Medicare Administrative Contractor (MAC) geographic jurisdictions).
• Phase II (July 17, 2017): Prior authorization requirements expand nationwide.

In order for Medicare to pay a claim for an item falling under one of the two HCPCS codes, a provider must include the order, relevant information from the beneficiary’s medical record, and relevant supplier-produced documentation. The information will be reviewed by the MAC before authorization is granted.

Additional guidance will be issued via subregulatory communications, including the timelines in which a MAC must review the information and make a provisional decision to the beneficiary.

If you would like assistance in evaluating the impact of this rule and program on your business or products, contact us at 202-558-5272 or e-mail us directly at gpugh@appliedpolicy.com.