CMS Publishes Final Rule for DME Prior Authorization

The publication of a final rule from the Centers for Medicare & Medicaid Services (CMS) brings the DME industry a step closer to a Medicare prior authorization process for many DME items.

In a Dec. 29 bulletin to stakeholders, the American Association for Homecare (AAHomecare) said CMS indicated implementation would begin 60 days after publication of the final rule in the Federal Register, which happened on Dec. 30. According to that timetable, prior authorization would begin Feb. 28. AAHomecare added in that bulletin, “CMS is still working on the timelines and process.”

The purpose of implementing a prior authorization policy, the final rule said, would be to reduce “unnecessary utilization and aberrant billing of certain DMEPOS items.”

DME with an average purchase price of $1000 or more or an average monthly rental fee of $100 or more would be considered for prior authorization inclusion, though the final rule indicated that not all items meeting that criteria would be subject to prior authorization.

The prior authorization process would require “a prior authorization requester” to “submit evidence that the item complies with all applicable Medicare coverage, coding and payment rules,” the final rule states. After receiving the documentation, CMS or a review contractor would “communicate a decision that provisionally affirms or non-affirms the request.”

Getting a “provisional affirmation” would be required for the DME supplier to be paid, the final rule added: “We are finalizing the provision to automatically deny payment for a claim for an item on the Required Prior Authorization List that is submitted without a provisional affirmation prior authorization decision.”

A CMS fact sheet on the new final rule said the nature of the documentation required would not change.

“Under the final rule, the prior authorization process will require the same information necessary to support Medicare payment today, just earlier in the process,” the fact sheet said. “It will not create new clinical documentation requirements. The prior authorization process assures that all relevant coverage, coding, and clinical documentation requirements are met before the item is furnished to the beneficiary and before the claim is submitted for payment.”

CMS said it has identified 135 DMEPOS items “as being frequently subject to unnecessary utilization.” The items on this Master List have also been scrutinized in Department of Health & Human Services Office of the Inspector General or U.S. Government Accountability Office national reports in 2007 or later, or been the subject of Comprehensive Error Rate Testing Improper Payment Reports for DME.

CMS added that the reviewer would “make a reasonable effort” to communicate the results of a prior authorization determination within 10 business days and to make a decision on a resubmitted prior authorization request within 20 business days. “These are maximum timeframes and will be adjusted downward for items that require less time for making a determination,” the fact sheet said.

CMS’s final Master List of DMEPOS “subject to frequent unnecessary utilization for prior authorization” includes mattresses, hospital beds, CPAP devices, oxygen concentrators, K0004 manual wheelchairs, power wheelchairs (including Group 1, 2 and 3), and prosthetics.

To read the CMS fact sheet, which includes a link to the final rule, click HERE.

About the Author

Laurie Watanabe is the editor of Mobility Management. She can be reached at

Rolling Dynamics, Rolling Resistance &  Optimizing Wheeled Prosthetics