Medicare to expand 'prior authorization' for device coverage

In a shift from the current system, Medicare is proposing to rule on seniors' coverage for home medical devices before the supplies are delivered or claims for payment are submitted.

The Centers for Medicare and Medicaid Services (CMS) is planning to expand the use of "prior authorization" for power scooters and wheelchairs, and introduce the process for several other categories of medical goods used at home.

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Officials said the effort is targeting improper payments and fraud in the system, when Medicare foots the bill for products aggressively marketed to patients and doctors who do not need them.

The agency estimated its effort would save Medicare $100 million to $740 million over 10 years, and argued the change would not mean delaying medical services or imposing additional paperwork on seniors.

"With prior authorization, Medicare beneficiaries will have greater confidence that their medical items and services are covered before services and supplies are rendered. This will improve access to services and quality of care,” CMS Administrator Marilyn Tavenner said in a statement.

Under current rules, Medicare usually determines whether to cover devices like power scooters after they have already been delivered to beneficiaries. Patients are responsible for the cost of the device if the program denies their claim.

Now, seniors looking to obtain home medical devices will have to submit coverage, coding and clinical documents for review prior to delivery of the supplies, rather than afterward.

"Prior authorization" is commonly used in private health insurance to create an administrative barrier to expensive or frequently abused prescription drugs. Consumer advocates oppose the process, arguing it blocks or delays care for patents.

Medicare adopted this tactic in a limited way in 2012 after an increase in fraud cases related to electronic scooters and other medical supplies, including back braces.

A congressional investigation found that some manufacturers were harassing seniors and doctors to order products they did not need and to bill Medicare for the cost.

Today, beneficiaries in seven states are subject to prior authorization when it comes to power scooters and wheelchairs.

Thursday's announcement adds an additional 12 states to the pilot program and proposes establishing prior authorization for a variety of new devices as part of a "master list," including prosthetics and orthotics.

The CMS promised to rule on initial requests for review within 10 business days and on subsequent requests within 20 business days.

The agency outlined a process for two-day review provided that the life or health of a Medicare beneficiary would be jeopardized under the standard timeframe.

Another part of the regulation would test the coverage precheck on two types of specialty care: nonemergency hyperbaric oxygen therapy; and repetitive, scheduled, nonemergency ambulance transport. Each demonstration would take place in three states.

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