CMS rule on medical equipment to cut improper payments, but risks delayed access

The Centers for Medicare & Medicaid Services finished 2015 with a final rule requiring prior authorization for certain durable medical equipment like wheelchairs, as well as prosthetics, orthotics and supplies, in a bid to cut down on fraud, abuse and overuse that amounted to $5 billion in FY 2014.

"CMS has had longstanding concerns about the improper payments related to DMEPOS items. 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 utilization of DMEPOS items. CMS has addressed these issues in recent years through the implementation of the DMEPOS Competitive Bidding Program, as well as heightened screening of suppliers, as authorized by the Affordable Care Act," explains a release.

The rule contains a master list of 135 devices "identified as being frequently subject to unnecessary utilization." They include various types of wheelchairs, diabetes devices like blood glucose strips, CPAP face masks, and a type of hospital bed.

Additional devices can be added to the list based on findings from government reports and can be removed if the "purchase amount drops below the payment threshold," according to the CMS release.

Next, CMS will institute prior authorization for a subset of items on the master lists, with the publication of the "required prior authorization list."

Prior authorization "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."

CMS said it will make an affirmative or non-affirmative decision within 10 business days. There will be process for resubmitting documentation, as well as an expedited review process for cases where the wait "could seriously jeopardize the life or health of the beneficiary."

There are concerns about extra paper work and the potential for delays among other stakeholders like the Center for Medicare Advocacy, a law firm that monitors access to Medicare, USA Today reports.

"Prior authorization programs by their very nature question the medical expertise and judgment of the treating physician," Don May, AdvaMed executive vice president of healthcare delivery policy told the news outlet. "They remove the decision-making process about appropriate care from patients and their physicians and turn it over to administrators who have no firsthand experience with the patient's condition."

Citing a report by the nonprofit Council for Medicare Integrity, USA Today reports that 53% of durable medical equipment bills had errors, resulting in $5 billion in improper payments in FY 2014.

Besides procedural moves like this one, the feds are increasingly taking enforcement action against gross abusers, and in FY 2014 convicted 8 people for defrauding the government in schemes involving wheelchairs.

And the government watchdog known as the Office of the Inspector General promised in November to put med tech reimbursement under the microscope during FY 2016, saying it will closely monitor CMS reimbursement to hospitals, nursing homes, hospices and providers of home healthcare, as well as its legal and investigative activities related to the federal payments.

CMS also said it recently expanded a prior authorization demonstration program for power mobility devices that was instituted in 2012, and covered 19 states. Among the covered states, the program cut monthly expenditures on codes related to the devices from $22 million in 2012 to $5 million in 2015.

- read the CMS release | here's the final rule
- here's USA Today's take

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