Funding Essentials

Capitalizing on the Opportunity of the PMD Prior Authorization Demo

For years, power mobility providers have been advocating for Medicare to establish clear and objective coverage criteria and documentation requirements to assist physicians and clinicians in capturing the necessary elements in their medical records.

This effort has increased due to the high audit activity that currently surrounds power wheelchairs, especially those coded K0823. Providers have struggled, second guessed themselves, reduced or stopped providing these medically necessary devices to Medicare beneficiaries due to the increased risk of payment recoupment.

While the vast majority of claims that are denied in audits are ultimately overturned for payment through the appeals process, this calls a physician’s evaluation and documentation methods into question and compromises a power mobility device (PMD) provider’s ability to dispense the prescribed, medically necessary device.

Opening Lines of Communication with Referral Sources

Many successful providers have put procedures in place to closely review the medical records, interpret the coverage criteria, educate physicians, clinicians and Medicare beneficiaries, communicate potential errors or omissions in the documentation received, and “audit proof” their files. While this strategy has taken its toll to some degree on the relationship providers have with their referral sources and further stresses the bottom line, it has helped open lines of communication with referral sources and has yielded success for providers in their ability to keep the reimbursement received.

To proactively address the situation, power mobility stakeholders have been asking the Centers for Medicare & Medicaid Services (CMS) to institute a true prior authorization (PA) process in the Medicare program for years. The agency is finally embarking on this with a demonstration project that started Sept. 1 for those providing PMDs to individuals who reside in California, Florida, Illinois, Michigan, New York, North Carolina and Texas. While some may approach this change with caution, successful providers will seek to capitalize on the opportunities it affords.

Reviewing the medical record and interpreting the coverage criteria will be a key part of the process for a PMD provider in the prior authorization setting. Providers who have not already incorporated this practice into their business model may submit the seven-element order, face to-face examination report, any additional medical records they receive, and the detailed product description to the Durable Medical Equipment Medicare Administrative Contractor (DME MAC) for a prior authorization decision. The DME MAC will review the documentation submitted, determine if the statutory and medical necessity requirements have been met, and render a decision to be postmarked within 10 business days of receipt of the information. With an affirmative decision, providers can rest assured that as long as their delivery documentation is in order, and they are not subject to an audit for any other reasons, they will be able to keep their money once the claim is processed.

How to Use Prior Authorization to Streamline Your Workflow

While this approach takes all of the pressure off the providers, it does have the potential to delay their ability to capitalize on the process if an affirmative decision is not rendered following the initial submission. Providers included in the demonstration who have not already done so would be wise to implement an internal process to review this information prior to submission to avoid such an occurrence when possible.

Providers who either implement an internal prescreen process, or utilize an external source for prescreening the documentation before submitting it to the DME MAC for prior approval, have the opportunity to manage the outcome of the order more effectively. If the prescreen reveals compliance with the medical necessity requirements and the provider has a high level of confidence the prior authorization will be affirmative, the provider can capitalize on this.

By ordering the equipment from the manufacturer and having it in stock and ready for delivery when the official decision is received, the provider is able to minimize their patient’s delay in access to the equipment and maximize their ability to bill and collect for it. If a perceived error or omission is found in the prescreening of the medical record(s), the provider will be well aware of the probability they will receive a non-affirmative decision upon initial submission of the prior authorization request and can plan accordingly.

Educating physicians, clinicians, and Medicare beneficiaries on the actual errors and omission of information in the medical record is far more acceptable than trying to communicate what you “think” might be perceived as missing in the event of an audit. If a non-affirmative prior authorization decision is rendered, it does not mean that the beneficiary does not have a medical need for the device. It simply means that the information submitted was incomplete or the reviewer was unable to affirm that the contemporaneous medical record substantiated the need for the device to warrant payment from the Medicare trust fund. In this situation, the physician, beneficiary and provider should expect to receive a detailed review results letter that “gives all the details about what was missing,” according to CMS.

A Teachable Moment for Physicians

Providers who have prescreened the documentation prior to submission can anticipate what information will be deemed missing and will be able to work with the beneficiary and physician in an expedient manner to obtain the additional information necessary to resubmit the prior authorization request.

For those who have not reviewed the documentation prior to submission, CMS stated on the July 27 PMD Prior Authorization Open Door Forum call, “The most important part of physician education that we are instituting here is the detailed review results letter. There’s nothing like sort of having it hit you in the face when it does. It is an individual beneficiary, one that you just saw a couple of weeks ago. Now you’re being told no, it’s not prior authorized, (which is) one of the best educational pieces that we could have put in place.”

Having CMS directly tell a physician what is missing or incomplete will relieve the HME provider of the burden of playing “middle man” in the prescribing process, which is what currently exists.

While the prior authorization resubmission process will take up to 20 business days for the DME MAC to render and postmark the new decision letter, providers who work closely with their referrals sources and patients to obtain the missing information will not only learn from the experience, but be in a much better position to capitalize on the knowledge gained in the process. As stakeholders become more familiar with the process, it will allow providers to more effectively manage future orders and reap the benefits of recurring revenue without the worries of an audit and recoupment of the payments.

This article originally appeared in the October 2012 issue of Mobility Management.

About the Author

Seth Johnson is the vice president of government affairs for Pride Mobility Products Corp. He is a board member of the National Coalition for Assistive and Rehab Technology (NCART), a former chairman of the American Association for Homecare's Complex Rehab and Mobility Council (CRMC), and is active within several state associations and various other industry stakeholder organizations and coalitions. He can be reached by voice at 1 (800) 800-8586, or online by visiting

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