DEPARTMENT OF HEALTH AND HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, MD 21244-1850 
 
 
 
CMCS Informational Bulletin 
DATE:   January 13, 2017 
FROM:  Vikki Wachino, Director 
Center for Medicaid and CHIP Services 
 
Tim Engelhardt, Director 
    Medicare-Medicaid Coordination Office  
 
SUBJECT:   Strategies to Support Dual Eligible Beneficiaries Access to Durable Medical 
Equipment, Prosthetics, Orthotics, and Supplies  
 
The purpose of this Informational Bulletin is to provide examples of effective strategies for states 
to better support timely access to durable medical equipment, prosthetics, orthotics, and supplies 
(DMEPOS) for beneficiaries dually eligible for Medicaid and Medicare (Medicare-Medicaid 
enrollees or dual eligible beneficiaries). Both Medicare and Medicaid cover DMEPOS, which 
can be essential to Medicare-Medicaid enrollees mobility, health status, independence in the 
community, and overall quality of life. However, the programs different eligibility, coverage, 
and supplier rules can impact access to medically appropriate DMEPOS and repairs of existing 
equipment for the population enrolled in both benefits. This Informational Bulletin describes 
strategies to promote timely access to needed DMEPOS while fulfilling states obligations to 
ensure Medicaid is payer of last resort. 
Background 
 
According to stakeholders,1 a common barrier to DMEPOS access stems from conflicting 
approval processes among Medicare and Medicaid that can leave suppliers uncertain about 
whether and how either program will cover items. Because suppliers lack assurance regarding 
how Medicare or Medicaid will cover DMEPOS at the point of sale2  and dual eligible 
beneficiaries (the majority of whom have incomes under 100 percent of the federal poverty level) 
generally cannot afford to pay out-of-pocket up front  suppliers may refuse to provide needed 
DMEPOS.     
 
Medicare is the primary payer for DMEPOS and other medical benefits covered by both 
programs, but limits DME to use in the home. Medicare generally only processes claims after the 
                                                           
1 See 2016 responses to Request for Comment on Access to DME  (https://www.regulations.gov/docket?D=CMS-
2016-0107) and 2011 comments submitted in response to Federal Register Request for Comment on Opportunities 
for Alignment under Medicaid and Medicare 
(http://www.regulations.gov/docket?dct=FR%25252BPR%25252BN%25252BO%25252BSR%25252BPS&rpp=25
&po=0&D=CMS-2011-0080)  
2 See 2013 CMCS Informational Bulletin: https://www.medicaid.gov/federal-policy-guidance/downloads/CIB-08-
02-2013.pdf   CMCS Informational Bulletin  Page 2 
 
equipment is delivered. Many of the Medicare requirements related to DMEPOS, including the 
definition and scope of the benefits, are mandated by federal statute.   
 
Medicaid typically covers Medicare cost-sharing amounts and may cover DMEPOS that 
Medicare does not, including certain specialized equipment that promotes independent living 
outside the home. Section 1902(a)(25) of the Social Security Act (the Act) requires each state, 
under its State Medicaid Plan, to take all reasonable measures to ensure that other payers pay to 
the limit of their legal liability before any Medicaid payment is available. Therefore, Medicaid 
pays secondary to most other legally liable payers, including Medicare. 
 
The strategies below address ways states can address the barriers described above while still 
ensuring they meeting obligations to be payer of last resort.   
 
Offer Medicaid Prior Authorization of DMEPOS for Dual Eligible Beneficiaries 
CMS encourages states to offer a process for suppliers to request prior authorization of more 
costly DMEPOS for dual eligible beneficiaries. Many states have already instituted Medicaid 
prior authorization processes, but often exclude dual eligible beneficiaries, or require a Medicare 
denial first before Medicaid prior authorization can be requested. As noted above, suppliers may 
be unwilling to deliver an item if the provider is uncertain whether the beneficiary meets 
Medicare coverage criteria. One strategy used by some states is to prior authorize an item but 
still require a supplier to submit the claim to Medicare first and obtain a denial before submitting 
to Medicaid for payment. This provides suppliers with confidence of Medicaid payment if the 
Medicare claim is denied and promotes more timely delivery of needed DMEPOS.   
Ensure DMEPOS Claims for Dual Eligible Beneficiaries are Assessed against Medicaids 
Broader Criteria 
On February 2, 2016, CMS issued updated regulations at 42 CFR 440.70 codifying long-
standing policy that Medicaid must cover appropriate medical supplies, equipment and 
appliances suitable for use in any setting in which normal life activities take place, other than 
inpatient settings. In other words, coverage cannot be limited to the home setting, as long as the 
other coverage requirements are met. The regulation3 was effective July 1, 2016 but will take 
effect in certain states up to two years later, depending on state legislative cycles. 
The regulation means that Medicaid may not use Medicare coverage as a complete proxy for 
Medicaid coverage of medical supplies, equipment and appliances for dual eligible beneficiaries.  
As noted above, Medicaid coverage of medical supplies, equipment and appliances is broader 
than Medicares, so it is critical that states assess claims for medical supplies, equipment, and 
appliances for dual eligible beneficiaries against these broader criteria.   
Medicare Prior Authorizations 
If a supplier requests Medicare prior authorization, a non-affirmed prior authorization decision is 
sufficient for meeting states obligation to pursue other coverage before considering Medicaid 
coverage.   
                                                           
3 See regulation: https://www.federalregister.gov/documents/2016/02/02/2016-01585/medicaid-program-face-to-
face-requirements-for-home-health-services-policy-changes-and   CMCS Informational Bulletin  Page 3 
 
The scope of the Medicare prior authorization program for DMEPOS has been limited to date. 
On September 1, 2012, CMS began the Prior Authorization of Power Mobility Devices (PMDs) 
Demonstration. The demonstration is currently active in 19 states and will continue through 
August 31, 2018. The DMEPOS codes for which prior authorization applies may be found here: 
https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-
FFS-Compliance-Programs/Medical-Review/PADemo.html.  
More recently, CMS issued a new regulation that establishes a prior authorization process for 
certain DMEPOS items subject to unnecessary utilization. See 42 CFR  414.234. This 
regulation became effective on February 29, 2016. In the federal register published on December 
19, 2016, CMS announced the selection of two items of durable medical equipment to be subject 
to required prior authorization in Illinois, Missouri, New York, and West Virginia beginning on 
March 19, 2017: 
  K0856: Power wheelchair, group 3 std., single power option, sling/solid seat/back, patient 
weight capacity up to and including 300 pounds  
  K0861: Power wheelchair, group 3 std., multiple power option, sling/solid seat/back, 
patient weight capacity up to and including 300 pounds 
 
CMS also announced its intent to expand the prior authorization process for codes K0856 and 
K0861 nationwide in July 2017. Further information on these codes can be found here: 
https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-
FFS-Compliance-Programs/Prior-Authorization-Initiatives/Prior-Authorization-Process-for-
Certain-Durable-Medical-Equipment-Prosthetic-Orthotics-Supplies-Items.html. Please refer to 
this same link for any future updates. 
States should be careful to only require a Medicare non-affirmed prior authorization decision for 
the specific items for which Medicare offers prior authorization. For example, in the Power 
Mobility Device demonstration, prior authorization is not offered for Group 4 wheelchairs, as 
they are excluded from Medicare coverage itself by Local Coverage Determination L33789.   
Applying These Strategies to Medicaid Managed Care Organizations (MCOs) 
States should consider incorporating these requirements and strategies into their contracts with 
Medicaid MCOs, Prepaid Inpatient Health Plans (PIHPs), and Prepaid Ambulatory Health Plans 
(PAHPs) when contracting with them to deliver Medicaid DMEPOS to dual eligible 
beneficiaries. 
For more information please contact Kristen Zycherman 
(Kristen.Zycherman@cms.hhs.gov) in the Medicare-Medicaid Coordination Office or 
Cathy Sturgill (Cathy.Sturgill@cms.hhs.gov) in the Center for Medicaid and CHIP 
Services.