CMS published its notice of intent in the July 29, 2014 Federal Register to expand the demonstration regarding prior authorizations from DME suppliers seeking payment for Power Mobility Devices from the original seven states to an additional twelve states. Louisiana is one of those states.
The original states included in the demonstration were California, Florida, Illinois, Michigan, New York, North Carolina and Texas. The expanded demonstration will include Louisiana, Pennsylvania, Ohio, Missouri, Washington, New Jersey, Maryland, Indiana, Kentucky, Georgia, Tennessee, and Arizona. According to CMS, these states have high expenditures and improper payments for Power Mobility Devices, based on 2012 billing data. The effective date for the expanded demonstration begins on October 1, 2014.
CMS initially implemented the demonstration in the original seven states that had a perceived history of high levels of improper payments and incidents of fraud related to Power Mobility Devices. The objective of the demonstration was to develop improved methods for investigation and prosecution of fraud and recovery of improper payments. Per CMS, the data accumulated from the demonstration could be used to detect collaboration between ordering physicians and suppliers in submitting fraudulent claims for Power Mobility Devices. Investigators will use changes in billing practices to determine whether to investigate a supplier. Specifically, CMS intends to analyze data pertaining to suppliers who no longer bill for Power Mobility Devices or who have a significant decrease in billing, as well as physicians or treating practitioners who have a high volume of submissions for Power Mobility Devices. CMS will also analyze data regarding HCPCS codes that show a dramatic increase in use.
Pursuant to the demonstration, a request for prior authorization and all relevant documentation to support medical necessity, as well as a written order for the covered item, must be submitted when one of the following HCPCS codes for a Power Mobility Device is ordered: Group 1 Power Operated Vehicles (K0800-K0802 and K0812); all standard power wheelchairs (K0813-K0829); all Group 2 complex rehabilitative power wheelchairs (K0835-K0843); all Group 3 complex rehabilitative power wheelchairs without power options (K0848-K0855); pediatric power wheelchairs (K0890 and K0891); and Miscellaneous power wheelchairs (K0898).
In order to be affirmed, the request for prior authorization must meet all applicable rules, policies, and National Coverage Determinations/Local Coverage Determinations requirements. Upon receipt of the complete request for prior authorization, CMS will conduct a complex medical review and will attempt to postmark the notification of the decision with the prior authorization number within ten business days. If a subsequent prior authorization request is submitted following a non-affirmative decision on the prior request, CMS will attempt to provide notification of the decision on the request within 20 business days. A request for expedited review in an emergency situation may be submitted, if the healthcare practitioner clearly documents, with supporting rationale, that the standard time frame (10 days) would seriously jeopardize the beneficiary’s life or health. In that case, CMS will provide notice of the decision within 48 hours of the complete submission.
If the prior authorization request is not affirmed, the claim will be denied upon submission by the supplier. The denial is subject to appeal by the beneficiary. Suppliers must issue an Advance Beneficiary Notice to the beneficiary prior to the delivery of the item in order for the beneficiary to be held financially liable when a Medicare payment denial is expected for the Power Mobility Device.
CMS also plans to assess a 25% payment reduction in the newly added demonstration states after the first three months of the expanded demonstration. CMS will assess a 25% payment reduction on those suppliers whose claims are determined to be payable but who did not first receive a prior authorization decision for the item. The supplier must submit the prior authorization number on the claim in order to not be subject to the 25% reduction in payment. For capped rental items, the payment reduction will be applied to all payments in the series. The 25% reduction in payment is not transferable to the Medicare beneficiary and is not subject to appeal. The payment reduction will not be applied to competitive bid contract suppliers.
DME suppliers and healthcare practitioners should be aware of this expanded prior authorization requirement that will go into effect on October 1, 1014, as well as the associated consequences for failure to obtain prior authorization for Power Mobility Devices. Suppliers and practitioners’ billing practices will be scrutinized by CMS to determine whether billing practices changed in relation to the demonstration and, if so, that could lead to an investigation by CMS.