Medicare Program; Prior Authorization for Power Mobility Device (PMD) Demonstration, 46439-46441 [2012-19014]

Agencies

• Centers for Medicare & Medicaid Services
• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 77, Number 150 (Friday, August 3, 2012)]
[Notices]
[Pages 46439-46441]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-19014]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-6042-N]


Medicare Program; Prior Authorization for Power Mobility Device 
(PMD) Demonstration

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Notice.

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SUMMARY: This notice announces a 3-year Medicare Prior Authorization 
for Power Mobility Device (PMD) Demonstration for certain PMD codes in 
seven states where there have been high incidences of fraudulent claims 
and improper payments

DATES: This demonstration begins on September 1, 2012.

FOR FURTHER INFORMATION CONTACT: Daniel Schwartz, 410-786-4197.
    Questions regarding the Medicare Prior Authorization for PMD 
Demonstration should be sent to pademo@cms.hhs.gov.

SUPPLEMENTARY INFORMATION:

I. Background

    Power Mobility Devices have had historically high incidents of 
fraud and improper payments. PMD suppliers also continue to be subject 
to significant law enforcement investigation.
    The Health Care Fraud Prevention and Enforcement Action Team (HEAT) 
Task Force was launched in May 2009 and is co-chaired by the Deputy 
Secretary of HHS and the Deputy Attorney General of DOJ. Medicare Fraud 
Strike Force teams are a key component of HEAT, since their inception 
and based on data driven investigations, prosecutors have filed more 
than 600 cases charging more than 1,150 defendants who collectively 
billed the Medicare program more than $2.9 billion in fraudulent 
claims. DME is a primary focus of investigation for these strike 
forces.
    The Comprehensive Error Rate Testing (CERT) Program noted in a 2010 
Report \1\ that 92.6 percent of claims for motorized wheelchairs did 
not meet Medicare coverage requirements. Although we recognize that 
many improper payments are not the result of willful fraud, this error 
rate represents over $822 million dollars in estimated improper 
payments.
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    \1\ https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/CERT/Downloads/CERT_Nov_2010_Appendix_-final.pdf Supplemental Appendix, Table B2.
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II. Legislative Authority

    Section 402(a)(1)(J) of the Social Security Amendments of 1967, 42 
U.S.C. 1395b-1(a)(1)(J), authorizes the Secretary to conduct 
demonstrations designed to develop or demonstrate improved methods for 
the investigation and prosecution of fraud in the provision of care or 
services provided under the Medicare program. We plan to conduct a 
demonstration that implements a prior authorization process for power 
mobility devices (PMDs), an area with historically high levels of fraud 
and improper payments, to develop improved methods for the 
investigation and prosecution of fraud

[[Page 46440]]

in order to protect the Medicare Trust Fund from fraudulent actions and 
the resulting improper payments. We are conducting this 3-year 
demonstration in California, Florida, Illinois, Michigan, New York, 
North Carolina, and Texas. The beneficiary's address as reported to the 
Social Security Administration (SSA) will determine participation in 
the demonstration.
    We believe this demonstration will provide the agency with valuable 
data through which the agency, working with its partners, can develop 
new avenues for combating the submission of fraudulent claims to the 
Medicare program for PMDs. We will share data developed from this 
demonstration within the agency, with our contractors, and with our law 
enforcement partners for further analysis and investigation. We believe 
that data evidencing changes in physician ordering and supplier billing 
practices that coincide with this demonstration could provide 
investigators and law enforcement with important information for 
determining how and where to focus their investigations concerning 
fraud in the provision of PMDs. For instance, results from this 
demonstration could potentially indicate collaboration between ordering 
physicians and suppliers in submitting fraudulent claims for PMDs. This 
data could assist investigators and law enforcement in targeting their 
investigations in this area. Additionally, changes in billing practices 
that result from this demonstration could provide specific leads for 
investigators and law enforcement personnel. For instance, where a 
supplier that frequently submitted claims prior to the demonstration 
stops submitting claims during the demonstration, law enforcement may 
determine it prudent to investigate that supplier.
    Data we will analyze will include the following:
     Suppliers who no longer bill or have a significant 
decrease in billing.
     Physicians/treating practitioners with a high volume of 
submissions.
     Codes that show a dramatic increase in use.
     Codes that show a dramatic decrease in use.
    The demonstration will likely have a secondary benefit to help 
identify and reduce improper payments. We recognize that many improper 
payments are not the result of willful fraud. Information shared with 
law enforcement will be limited to data on those providers and 
suppliers who are potentially submitting fraudulent claims and other 
information that we believe will assist with the investigation and 
prosecution of fraud.
    Section 402(b) of the Social Security Amendments of 1967 authorizes 
the Secretary to waive requirements in Title XVIII that relate to 
reimbursement and payment in order to carry out the demonstrations 
authorized under section 402(a). In accordance with section 402(b), the 
Secretary waives certain requirements of sections 1834(a), 1834(j)(4) 
and 1879 of the Social Security Act to the extent necessary to 
implement this demonstration, including, but not limited to, certain 
payment and reimbursement regulations set forth at 42 CFR part 414, 
Subpart D and 42 CFR Part 411, Subpart K.

III. Provisions of the Notice

    This demonstration will implement a prior authorization process for 
PMDs in seven states where historically there has been extensive 
evidence of fraud and improper payments (CA, FL, IL, MI, NY, NC, and 
TX).
    The prior authorization process under this demonstration is 
available for the following codes for Medicare payment:
     Group 1 Power Operated Vehicles (K0800 through K0802 and 
K0812).
     All standard power wheelchairs (K0813 through K0829).
     All Group 2 complex rehabilitative power wheelchairs 
(K0835 through K0843).
     All Group 3 complex rehabilitative power wheelchairs 
without power options (K0848 through K0855).
     Pediatric power wheelchairs (K0890 and K0891).
     Miscellaneous power wheelchairs (K0898).
    Prior to the start of the demonstration, we have conducted and will 
continue to conduct outreach and education including webinars, in-state 
meetings and other education sessions. Additional information about the 
implementation of the prior authorization demonstration is available on 
the CMS Web site (go.cms.gov/PAdemo). In addition, suppliers who have 
recently furnished and practitioners who have recently ordered a PMD 
for a beneficiary residing in a demonstration state will be notified 
via certified letters about the demonstration prior to the start date 
of the demonstration.
    Under this demonstration, a physician, treating practitioner, or 
supplier will be encouraged to submit to their Durable Medical 
Equipment (DME) Medicare Administrative Contractor (MAC) a request for 
prior authorization and all relevant documentation to support Medicare 
coverage of the PMD item along with the written order for the covered 
item. The physician, treating practitioner or supplier who submits the 
request on behalf of the physician or treating practitioner, is 
referred to as the ``submitter.'' In order to be affirmed, the request 
for prior authorization must meet all applicable rules, policies, and 
National Coverage Determination (NCD)/Local Coverage Determination 
(LCD) requirements for PMD claims.
    LCD requirements mandating physician/treating practitioner 
origination, such as the seven-element order, face-to-face encounter 
documentation and whatever other clinical documentation is necessary, 
must be completed by the physician/treating practitioner regardless of 
which entity is functioning as the submitter. The supplier will still 
complete the detailed product description regardless of which entity is 
functioning as the submitter.
    After receipt of all relevant documentation, CMS or its agents will 
make every effort to conduct a review and postmark the notification of 
their decision with the prior authorization number within 10 business 
days. Notification is provided to the physician/treating practitioner, 
supplier, and the Medicare beneficiary for the initial submission. If a 
subsequent prior authorization request is submitted after a 
nonaffirmative decision on a prior authorization request, then CMS or 
its agents will make every effort to conduct a review and postmark the 
notification of decision with the prior authorization number within 20 
business days. These timeframes will become part of the contractors' 
performance metrics.
    There will also be a mechanism in place to request an expedited 
review in emergency situations where a practitioner indicates clearly, 
with supporting rationale that the standard (routine) timeframe for a 
Prior Authorization Decision (10 days) could seriously jeopardize the 
beneficiary's life or health. In these cases, the contractor will 
conduct an expedited review. The expedited request must be accompanied 
by the required supporting documentation for this request to be 
considered complete thus commencing the 48 hours for review. 
Inappropriate expedited requests may be downgraded to standard 
requests. After conducting an expedited review, CMS or its agents will 
communicate a decision for the prior authorization request to the 
submitter within 48 hours of the complete submission.
    The following explains the various prior authorization scenarios:
     Scenario 1: When a submitter sends a prior authorization 
request to the DME

[[Page 46441]]

MAC with appropriate documentation and all relevant Medicare coverage 
and documentation requirements are met for the PMD, then the DME MAC 
sends an affirmative prior authorization decision to the physician or 
treating practitioner, supplier, and Medicare beneficiary. When the 
claim is submitted to the DME MAC by the supplier, it is linked to the 
Prior Authorization via the claims processing system and so long as all 
applicable requirements in the applicable NCD/LCD are met, the claim is 
paid.
     Scenario 2: When a submitter sends a prior authorization 
request but all relevant Medicare coverage requirements are not met for 
the PMD, then the DME MAC sends a nonaffirmative prior authorization 
decision to the physician or treating practitioner, supplier, and 
Medicare beneficiary advising them that Medicare will not pay for the 
item. A supplier can deliver the PMD, and submit a claim with a non-
affirmative prior authorization decision, at which point the DME MAC 
would deny the claim. The supplier and/or the beneficiary would then 
have the Medicare denial for secondary insurance purposes and would 
have full appeal rights.
    If an applicable PMD claim is submitted without a prior 
authorization decision it will be stopped and documentation will be 
requested to conduct medical review. After the first 3 months of the 
demonstration, we will assess a payment reduction for claims that, 
after review, are deemed payable, but did not first receive a prior 
authorization decision. As evidence of compliance, the supplier must 
submit the prior authorization number on the claim in order to avoid a 
25 percent payment reduction. The 25 percent payment reduction is non-
transferrable to the beneficiary and not subject to appeal. In the case 
of capped rental items, the payment reduction will be applied to all 
claims in the series.
    The 25-percent reduction in the Medicare payment is for each 
payable base claim not preceded by a prior authorization request except 
in competitive bidding areas. If a competitive bid contract supplier 
submits a payable claim for a beneficiary with a permanent residence in 
a competitive bidding area, that is included in the supplier's 
contract, without first receiving a prior authorization decision, that 
competitive bid supplier would receive the applicable single payment 
amount under the competitive bid program, and would not be subject to 
the 25-percent reduction. These suppliers must still adhere to all 
other requirements of the demonstration.
     Scenario 3: When a submitter sends a prior authorization 
request where documentation is incomplete, the prior authorization 
request is sent back to the submitter with an explanation about what 
information is missing. The submitter can rectify the situation and 
resubmit the prior authorization request. The physician or treating 
practitioner, supplier, and Medicare beneficiary are also notified.
     Scenario 4: When the DME supplier fails to receive a prior 
authorization decision, but nonetheless delivers the item to the 
beneficiary and submits the claim to the DME MAC for payment, the PMD 
claim will be reviewed under normal medical review processing 
timeframes.
    ++ If the claim is determined to be not medically necessary or 
insufficiently documented, the claim will be denied. The supplier and/
or beneficiary can appeal the claim denial. If the claim, after review, 
is deemed not payable then all current beneficiary/supplier liability 
policies and procedures as well as appeal rights remain in effect.
    ++ If the claim is determined to be payable, it will be paid. 
However, 3 months after the start of the demonstration, a 25-percent 
reduction in the Medicare Payment will be applied for failure to 
receive a prior authorization decision before the submission of a 
claim. This payment reduction will not be applied for competitive 
bidding program contract suppliers submitting claims for beneficiaries 
who maintain a permanent residence in a Competitive Bidding Area in 
their contracts according to the Common Working File (CWF)); these 
contract suppliers will continue to receive the applicable single 
payment amount under their contracts. The 25-percent payment reduction 
is non-transferrable to the beneficiary for the claims that are deemed 
payable. This payment reduction will begin 3 months after the start of 
the demonstration and is not subject to appeal. In the case of capped 
rental items the payment reduction will be applied to all claims in the 
series. After a claim is submitted and processed, appeal rights are 
available as they normally are.
    Under the demonstration, we will work to limit the impact on 
beneficiaries. We will educate beneficiaries as part of this 
protection. If the prior authorization request is not affirmed, and the 
claim is still submitted by the supplier, the claim will be denied in 
full, but beneficiaries will continue to have all normal appeal rights 
as well as the option of signing an Advance Beneficiary Notice in order 
to receive and be liable for payment for a denied PMD.
    Additional information is available on the CMS Web site at 
go.cms.gov/PAdemo.

IV. Collection of Information Requirements

    We announced and solicited comments for the information collection 
requirements associated with the Medicare Prior Authorization for Power 
Mobility Device (PMD) Demonstration for certain PMD codes in 60-day and 
30-day Federal Register notices that published on February 7, 2012 (77 
FR 6124) and May 29, 2012 (77 FR 31616), respectively. The information 
collection requirements are approved under OMB control number 0938-
1169.

    Authority:  Section 402(a)(1)(J) of the Social Security 
Amendments of 1967.

    Dated: July 30, 2012
Marilyn Tavenner,
Acting Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2012-19014 Filed 8-1-12; 4:15 pm]
BILLING CODE 4120-01-P