Finalized DME rule targets fraud, abuse

The Centers for Medicare and Medicaid Services has finalized a rule that creates a prior authorization process for some durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) that it has determined are often subject to unnecessary utilization – i.e. healthcare fraud.

The rule was first proposed in May 2014 and included a Master List of 135 items frequently subject to unnecessary utilization.

CMS has had longstanding concerns about the improper payments related to DMEPOS items.  The Department of Health and Human Services’ Office of the Inspector General and the U.S. Government Accountability Office have published a number of reports indicating questionable billing practices by suppliers, inappropriate Medicare payments and questionable use of DMEPOS items. Medicare spent about $6.3 billion on durable medical equipment in 2014.

As we have written about previously, CMS has addressed these issues in recent years through the implementation of the DMEPOS Competitive Bidding Program.

The new authorization process will require the same information needed to support Medicare payments today, just earlier in the process. 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 provided to the beneficiary and before the claim is submitted for payment. CMS says this is designed to ensure that beneficiaries are not held responsible for the cost of items that are not eligible for Medicare payment.

“CMS believes prior authorization is an effective way to reduce or prevent questionable billing practices and improper payments for DMEPOS items.  Access is preserved in this rule by having both specified timeframes for review and approval of requests, and an expedited process in cases where delays jeopardize the health of beneficiaries.”

Items subject to prior authorization are those with an average purchase fee of $1,000 or more, or an average rental fee of $100 or more, and are the subject of Office of the Inspector General or U.S. Government Accountability Office, or other relevant reports.

CMS will publish the required prior authorization list in the Federal Register with 60-days’ notice before implementation of prior authorization for those items.

The Health Law Offices of Anthony C. Vitale understands the laws impacting the DMEPOS arena. If you find yourself the target of an investigation give us a call. We represent healthcare professionals in state and federal court who are charged with fraudulent billing, kickbacks, Medicare and Medicaid fraud and false claims. Our team of highly skilled attorneys and consultants are here to help you before you become the focus of an investigation and will aggressively defend you should you become the target of one.

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The Health Law Offices of Anthony C. Vitale