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[Federal Register Volume 79, Number 145 (Tuesday, July 29, 2014)]
[Notices]
[Pages 44038-44040]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-17805]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-6057-N]

Medicare Program; Expanded Medicare Prior Authorization for Power 
Mobility Devices (PMDs) Demonstration

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

ACTION: Notice.

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SUMMARY: This notice announces the expansion of the Medicare Prior 
Authorization for Power Mobility Devices (PMDs) Demonstration to 12 
additional states.

DATES: This expanded demonstration begins on October 1, 2014.

FOR FURTHER INFORMATION CONTACT: Doris M. Jackson, (410) 786-4459.
    Questions regarding the Medicare Prior Authorization for Power 
Mobility Device Demonstration should be sent to pademo@cms.hhs.gov.

SUPPLEMENTARY INFORMATION:

I. Background

    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. On September 1, 2012, we 
implemented the Medicare Prior Authorization for Power Mobility Devices 
(PMDs) Demonstration that would operate for a period of 3 years 
(September 1, 2012 through August 31, 2015). The demonstration was 
initially implemented in California, Florida, Illinois, Michigan, New 
York, North Carolina, and Texas. These states were selected for the 
demonstrations based upon their history of having high levels of 
improper payments and incidents of fraud related to PMDs. The objective 
of the demonstration is to develop improved methods for the 
investigation and prosecution of fraud in order to protect the Medicare 
Trust Fund from fraudulent actions and any resulting improper payments. 
This demonstration is providing 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 and improving methods for the investigation and 
prosecution of PMD fraud. We will share demonstration data within the 
agency, with our contractors, and with 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.

Based on preliminary data collected, spending per month on PMDs in the

[[Page 44039]]

seven demonstration states decreased after September 2012, indicating 
that physicians ordering and supplier billing practices have changed as 
a result of the demonstration. In addition, spending per month on PMDs 
decreased in the non-demonstration states. National suppliers have 
adjusted their billing practices nationwide and appear to have 
increased compliance with our policies in all locations, not just their 
offices in the demonstration states.

II. Provisions of the Notice

    Because of the initial success of the demonstration in reducing 
spending on PMDs, we are expanding the demonstration to 12 additional 
states (Pennsylvania, Ohio, Louisiana, Missouri, Washington, New 
Jersey, Maryland, Indiana, Kentucky, Georgia, Tennessee, and Arizona) 
which have high expenditures and improper payments for PMDs based on 
2012 billing data. The 19 states selected for the demonstration, which 
include the 7 current and 12 additional states account for 71 percent 
of expenditures for PMDs in 2012. The remaining states and territories 
would be the control group for the demonstration.
    Prior to the start of the expanded demonstration, contractors and 
the public will be notified about the expansion. This notice will serve 
as notification in addition to Web site postings and tweets.
    CMS or its agents will continue to conduct outreach and education 
including webinars, in-state meetings, and other educational sessions 
in the additional states as appropriate. Updated information will be 
posted to the CMS Web site (http://go.cms.gov/PADemo). We will also 
work to limit the impact on Medicare beneficiaries by educating the 
Medicare beneficiaries about their protections. In addition, 
physicians, treating practitioners, and suppliers who have recently 
ordered a PMD for a beneficiary residing in a demonstration state will 
be notified via letter about the expanded demonstration prior to the 
start date of the demonstration.
    Under the expanded demonstration, we will continue to follow the 
policies and procedures that are currently in place for the 
demonstration. In accordance with current demonstration policy, a 
request for prior authorization and all relevant documentation to 
support the medical necessity along with the written order for the 
covered item must be submitted when one of the following Healthcare 
Common Procedures Coding System (HCPCS) codes for a PMD is ordered:

 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).

Under this demonstration, a physician, treating practitioner or 
supplier may submit the prior authorization request and all relevant 
documentation to support Medicare coverage of the PMD item along with 
the written order for the covered item to their Durable Medical 
Equipment (DME) Medicare Administrative Contractor (MAC). The 
physician, treating practitioner or supplier who submits the request 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. The LCD documentation requirement mandates that the 
physician or treating practitioner shall complete the seven element 
order, face-to-face encounter, and whatever other clinical 
documentation that is necessary to determine medical necessity 
regardless of which entity is functioning as the submitter. The 
supplier completes the detailed product description (DPD) 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 complex medical 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 non-affirmative decision on a prior authorization 
request, 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.
    If the prior authorization request is not affirmed, and the claim 
is submitted by the supplier, the claim will be denied. Medicare 
beneficiaries may use existing appeal rights to contest claim denials. 
Suppliers must issue an Advance Beneficiary Notice to the beneficiary 
per CMS policy, prior to delivery of the item for the beneficiary to be 
held financially liable when a Medicare payment denial is expected for 
a PMD.
    Submitters may also request expedited reviews 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. The expedited request must be accompanied 
by the required supporting documentation for this request to be 
considered complete thus commencing the 48-hour 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: A submitter sends a prior authorization 
request to the DME MAC with appropriate documentation and all relevant 
Medicare coverage and documentation requirements are met for the PMD. 
The DME MAC then sends an affirmative prior authorization decision to 
the physician or treating practitioner, supplier, and Medicare 
beneficiary. The supplier submits the claim to the DME MAC and the 
claim is linked to the prior authorization via the claims processing 
system. Provided all requirements in the applicable NCD/LCD are met, 
the claim is paid.
     Scenario 2: A submitter sends a prior authorization 
request, but all relevant Medicare coverage and documentation 
requirements are not met for the PMD. The DME MAC sends a non-
affirmative prior authorization decision to the physician or treating 
practitioner, supplier, and Medicare beneficiary advising them that 
Medicare will not pay for the item. If the supplier delivers the PMD 
and submits a claim with a non-affirmative prior authorization 
decision, the DME MAC would deny the claim. The supplier and/or the 
Medicare beneficiary would then have the Medicare denial for secondary 
insurance purposes and would have full appeal rights. Existing 
liability provisions with respect to delivery of a valid Advance 
Beneficiary Notice of Noncoverage (ABN) apply.
    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. As with the

[[Page 44040]]

initial states in the demonstration, after the first 3 months of the 
expanded demonstration, we will assess a payment reduction in the new 
states 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 not be subject to the 25-percent payment 
reduction. The 25-percent payment reduction is non-transferrable to the 
Medicare 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 Medicare 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 contract 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: A submitter sends a prior authorization 
request where documentation is incomplete. The DME MAC sends back the 
prior authorization request to the submitter with an explanation about 
what information is missing and notifies the physician or treating 
practitioner, supplier, and Medicare beneficiary. The submitter may 
resubmit the prior authorization request.
     Scenario 4: The DME supplier fails to submit a prior 
authorization request, but nonetheless delivers the item to the 
Medicare beneficiary and submits the claim to the DME MAC for payment. 
The PMD claim is reviewed under normal medical review processing 
timeframes and if approved the 25-percent payment reduction would 
apply.
    ++ If the claim is determined to be not medically necessary, or 
insufficiently documented the claim will be denied. The supplier or 
Medicare beneficiary can appeal the claim denial. If the claim, after 
review, is deemed not payable, then all current Medicare beneficiary/
supplier liability policies and procedures and appeal rights remain in 
effect.
    ++ If the claim is determined to be payable, it will be paid. 
However, the 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 
to competitive bidding program contract suppliers submitting claims for 
Medicare beneficiaries who maintain a permanent residence in a 
Competitive Bidding Area (CBA) according to the Common Working File 
(CWF). These contract suppliers will continue to receive the applicable 
single payment amount as determined in their contract. The 25-percent 
payment reduction is non-transferrable to the Medicare beneficiary for 
claims that are deemed payable. This payment reduction amount will 
begin 3 months after the start of the expanded 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 if necessary.
    If the prior authorization request is not affirmed, and the claim 
is submitted by the supplier, the claim will be denied. Medicare 
beneficiaries may use existing appeal rights to contest claim denials. 
Suppliers must issue an ABN to the beneficiary per CMS policy, prior to 
delivery of the item in order for the beneficiary to be held 
financially liable when a Medicare payment denial is expected for a 
PMD.
    Additional information is available on the CMS Web site (http://go.cms.gov/PADemo).

III. Collection of Information Requirements

    In the February 7, 2012 Federal Register (77 FR 6124) and the May 
29, 2012 Federal Register (77 FR 31616), we published a 60-day and a 
30-day notice, respectively, announcing and soliciting comments 
concerning the information collection requirements associated with the 
Medicare Prior Authorization for PMDs Demonstration implemented on 
September 1, 2012. The information collection request for the 
demonstration was approved under OMB control number 0938-1169. 
Subsequent to the initial approval, we published an additional Federal 
Register notice (79 FR 18913) announcing that we were seeking emergency 
review and approval from OMB regarding the expansion of the 
demonstration; specifically, we revised the information collection 
request to account for the addition of 12 new states to the program. 
The emergency revised information collection request was approved on 
June 13, 2014, and is still approved under OMB control number 0938-1169 
with an expiration date of December 31, 2014.

    Dated: June 27, 2014.
Marilyn Tavenner,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2014-17805 Filed 7-28-14; 8:45 am]
BILLING CODE 4120-01-P
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