REIMBURSEMENT PAGE
By JOE MCTERNAN
Medicare Prior Authorization
E! QU IZ M EARN
CREDITS
The final rule published December 30 offers some helpful information but leaves many questions unanswered Editor’s Note—Readers of CREDITS Reimbursement Page are now eligible to earn two CE credits. After reading this column, simply scan the QR code or use the link on page 18 to take the Reimbursement Page quiz. Receive a score of at least 80 percent, and AOPA will transmit the information to the certifying boards.
CE
Medicare Fee EXECUTIVE
-For-Service
er Payments
2013 Improp
Report
SUMMARY
Rate ntage of Compliance e rate – the perce s submitted claim (FFS) complianc fee-for-service nt. This calculation included Medicare paid 1 s that 2013 Medicare perce The estimated paid correctly – was 89.9 2012. This mean rs through June dolla 2011 icare July Med onth period from this time. during the 12-m .4 billion correctly during $321 an estimated dollars ent Rate e of Medicare Improper Paym – the percentag ated $36.0 billion 10.1 Percent payment rate oper impr paid an estim ent FFS 2013 Medicare nt. This means that Medicare adjusted the improper paym of The estimated CMS the effect y - was 10.1 perce June 2012. For 2013, to account for nt and paid incorrectl perce 2011 for 10.1 een July odology percent to A. The meth incorrectly betw ($2.2 billion) from 10.7 nt r Medicare Part . rate by 0.6 perce hospital claims denied unde was unchanged from 2012 rate ient oper payment rebilling inpat 2013 FFS impr calculating the r Payments (accounting for ses of Imprope report period or Common Cau during the 2013 ort the services oper payments of documentation to supp impr of e caus on was lack The most comm oper payments) impr total of atient, 56.8 percent icare. h, hospital outp Med to healt e d hom bille supplies hetics ent rate were improper paym ble medical equipment prost driving the 2013 , dura The service types ity, physician/lab/ambulance hospital services. facil S),and inpatient skilled nursing EPO (DM supplies rt orthotics and Payments Repo S) ice Improper an Services (HH Fee-For-Serv Health and Hum (IPIA) of 2002, The Medicare Department of mation in the Information Act of 2010 requires lements infor oper Payments Act (IPERA) This report supp Report (AFR). The Impr very Reco on and ents Eliminati Agency Financial Paym oper Impr amended by the
89.9 Percent
ces Human Servi of Health & Department OFFICE OF RAL GENE INSPECTOR
cial Agency Finan (FY) 2013 HHS correspond in the Fiscal Year s was selected does not l FY claim rate is published ies. The federa per payment Medicare FFS lation methodolog the sample of care FFS impro The 2013 Medi the time period from which claims review and rate calcu the ver, Report. Howe to practical constraints with with the FY due to September. er runs from Octob
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BY E BILLING 1 QUESTIONABL ER LIMB OW L OF RS SUPPLIE PROSTHESES .
nson Daniel R. Levi eral Inspector Gen August 2011 170 OEI-02-10-00
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FEBRUARY 2016 | O&P ALMANAC
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N DEC. 30, 2015, CMS published the final rule that set the parameters for implementation of Medicare prior authorization for certain durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) items, including most lower-limb prosthetic Health-Care Common Procedure Coding System (HCPCS) codes. The final rule was published in the Dec. 30, 2015, issue of the Federal Register. While the final rule provided some information regarding the eventual implementation of Medicare prior authorization, it left many questions unanswered. This month’s Reimbursement Page provides an overview of the aspects of prior authorization that were established by the final rule, as well as an explanation of the aspects that remain ambiguous or unanswered.
What the Final Rule Tells Us
The prior authorization final rule established the final list of HCPCS codes that are eligible for inclusion in prior authorization. This list consists of 135 HCPCS codes, 84 of which represent HCPCS codes that describe lower-limb prostheses. To be considered eligible for inclusion in Medicare prior authorization, HCPCS codes must be included in the DMEPOS fee schedule, have an average purchase price of $1,000 or more or an average monthly rental rate of $100 or more, and meet one of the following qualifying criteria: • The item is identified in a report from the U.S. Government Accountability Office or the U.S. Department of Health and Human Services’ Office of the Inspector General (OIG) that
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BUSINESS CE
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is national in scope and published in 2007 or later as having a high rate of fraud or unnecessary utilization; or • The item is listed in the 2011 or later version of the Comprehensive Error Rate Testing (CERT) program’s annual Medicare Fee-for-Service Improper Payment Rate Report in the appendix on “Service-Specific Overpayment Rates: DME.” The 84 lower-limb prosthesis HCPCS codes included in the list in the final rule all meet the $1,000 average purchase price threshold and were included in the OIG report published in August of 2011 titled Questionable Billing by Suppliers of Lower-Limb Prostheses. The final rule did remove five prosthetic codes that were included in the proposed rule that did not meet the minimum average purchase price threshold of $1,000. These codes included two prosthetic cover codes (L5705 and L5706), two exoskeletal knee/shin system codes (L5718 and L5722), and one endoskeletal knee/shin system code (L5816). The prior authorization final rule also announced that while there are currently 135 HCPCS codes that are eligible for inclusion in prior authorization, CMS will not include all of these codes in the initial implementation of any prior authorization program. CMS will publish a subset of the 135 HCPCS codes that will be subject to prior authorization initially; CMS referred to this list as the “requires prior authorization” list. The final rule announced that following any announcement on the “requires prior authorization” list, there will be a 60-day notice period prior to implementation. In the prior authorization final rule,