Not everything that looks like a gift turns out to be one, just as not every shortcut saves time overall.
A current example: The Centers for Medicare & Medicaid Services (CMS) will be offering to exclude a select group of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) providers from prior authorization requirements, according to a Jan. 13 announcement from CGS Administrators, the Jurisdictions B and C DME MAC.
“If the supplier’s [prior authorization] approval rate is 90% or higher, they will have an option each year to be exempt from submitting prior authorizations for that year,” CGS said. “To determine supplier eligibility for continued exemption, the DME MACs will conduct an annual post-payment medical review sample to ensure compliance. From this claim sample, suppliers must again meet a claim approval rate of 90% or greater to continue their exemption.”
This sounds like a great opportunity to streamline back-office operations. As described by CGS, the DME MACs will review suppliers’ approval ratings for past prior authorization claims. Providers who have achieved at least a 90% prior authorization approval rate will be able to skip the prior authorization process — but will also be reviewed yearly to make sure they’re still meeting that 90% approval mark.
Providers who review at less than 90% would be put back under the prior authorization requirement.
PMD prior authorization history
Of course, providers of power mobility devices (PMDs) have been dealing with prior authorization for a long time. More than 10 years ago, I wrote about CMS extending its PMD prior authorization demonstration project into 2018. At that time, 19 states were in the demo project: California, Florida, Illinois, Michigan, New York, North Carolina, Texas, Arizona, Georgia, Indiana, Kentucky, Louisiana, Maryland, Missouri, New Jersey, Ohio, Pennsylvania, Tennessee and Washington.
And by the time I wrote that update in September 2015, industry experts and PMD providers had figured out that though CMS chose states for the demonstration project “based upon their history of having high levels of improper payments and incidents of fraud related to PMDs,” the prior authorization process had very clear benefits.
The most critical advantage, from a provider’s standpoint, was getting confirmation of the Medicare beneficiary’s PMD eligibility before the provider configured, ordered, paid for and delivered these very expensive devices. In September 2015, the devices involved included scooters, standard power wheelchairs, pediatric power chairs, and Group 2 and Group 3 power chairs in certain HCPCS code groups.
The ability to get that affirmation of beneficiary eligibility up front reduced risk for providers, who could feel much more confident that they would get paid for PMDs they delivered.
Prior authorization in the DMEPOS space
Now CMS is basically offering to roll back that layer of protection for providers who maintain a 90% or better prior authorization approval level.
While being able to skip the prior authorization process might sound like a timesaver up front, Noel Neil, JD, CDME, chief compliance officer for ACU-Serve, urged providers to pause.
“A surface-level review may make exemption from Medicare’s prior authorization requirements appear attractive for DMEPOS suppliers,” Neil told Mobility Management. “However, the practical realities of prior authorization within the DMEPOS environment may differ from those experienced by physicians, laboratories or hospitals. Other provider types may welcome the idea of prior authorization exemption. However, for DMEPOS suppliers, prior authorization serves not only as confirmation that an item is reasonable and necessary — it also provides meaningful protection from downstream audit risk.”
Neil pointed out that when a claim is submitted with “an affirmed prior authorization decision,” that claim is then excluded from review by the Recovery Audit Contractor (RAC) and from Medicare Administrative Contractor (MAC) Targeted Probe and Educate (TPE) audits.
“This safeguard is particularly valuable for suppliers furnishing high-cost, high-complexity equipment, such as customized power mobility devices and pneumatic compression devices, both of which will be incorporated into the prior authorization program beginning April 2026,” Neil said. “Prior authorization offers suppliers greater confidence when delivering expensive equipment, reducing financial uncertainty and administrative exposure.”
Potential back-office disruption
That protection is such a benefit that “Even suppliers achieving a 90% or higher affirmation rate should carefully consider the implications before electing exemption,” Neil said, explaining that claims submitted without a Unique Tracking Number may be subject to MAC or RAC review.
“These audits are not only administratively burdensome, they also carry the risk of recoupment,” he said. “Challenging denials through the appeals process can be costly, time consuming and disruptive to operations.”
Then there’s the disruption of transitioning back and forth between skipping prior authorization and obtaining prior authorization — a process that “introduces unnecessary complexity,” can slow the provision process, and can raise the risk of process errors.
When back-office staff are forced to resume submitting for prior authorizations after previously operating without it, “staff must again adjust workflows, increasing the likelihood of documentation errors or missed steps,” Neil said. “Maintaining a consistent, stable process minimizes risk and supports compliance. For example, if the supplier did not receive the notification of the resumption of prior authorization, they may dispense an item without obtaining a prior authorization. This would result in unnecessary denials.”
For all those reasons, Neil cautioned providers about opting out of prior authorization processes without carefully considering the full impact.
“Remaining within the prior authorization framework provides a more predictable, defensible and operationally efficient path for DMEPOS suppliers,” he said. “The protections it affords — particularly in an environment of increasing audit scrutiny — far outweigh the perceived benefits of temporary exemption.”
PMD providers learned long ago the many benefits of prior authorization. Sometimes, what is presented as a gift turns out not to be one — such as a “promotion” that comes with no raise, just more responsibility.
Something to consider if you are facing the prior authorization opt-out this spring.
