Moving the HME Industry Forward

Legislative/Advocacy

CMS Issues Prior Authorization Final Rule

January 4, 2016

WASHINGTON, DC – CMS issued the Medicare Program: Prior Authorization Process for Certain Durable Medical Equipment, Prosthetics, Orthotics, and Supplies final rule that would establish a prior authorization process for certain DMEPOS items that they cite as frequently subject to unnecessary utilization.



According to CMS’ fact sheet on the new rule, “the prior authorization process will require the same information necessary to support Medicare payment today, just earlier in the process.”

The initial “Master List” of 135 DMEPOS items identified as being frequently subject to unnecessary utilization can be found in this pre-publication edition of the rule (pdf link), starting on page 41.

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 or U.S. Government Accountability Office 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 from 2011 onward.
The rule will be implemented within 60 days of being published in the Federal Register.

More Analysis to Come
While AAHomecare will provide additional perspective and analysis on the new rule shortly, two particular items stand out on initial reading:
• CMS is still working on the timelines and process, which will be addressed in sub-regulatory guidance, stating that it is designing a PA process that is “nimble and efficient” when action is needed quickly (p. 35) acknowledging that the original timeframes “may have presented a barrier to timely care in certain circumstances,” and planning to “issue the timeframes in subregulatory guidance,” a process that they believe will “create flexibility to quickly modify the timeframes if issues are identified.” (p. 37-38)
• Oxygen Concentrators (E1390) have been added to the current Master List; CMS states that this category was “mistakenly left off the proposed Master List.” (p. 40).