New CMS prior authorization rule could save Medicare $580M

CMS issued a rule Tuesday requiring prior authorization before Medicare will pay for durable medical equipment frequently subject to fraudulent and improper payments, according to USA Today.  

CMS, HHS' Office of Inspector General and the Government Accountability Office highlighted longstanding financial concerns related to wheelchairs, prosthetics and orthotics among other medical equipment. In October, the Council for Medicare Integrity reported a 53.1 percent error rate for durable medical equipment billing in fiscal year 2014, accounting for $5 billion in improper payments.

The new rule could save Medicare $10 million within the first year and $580 million over a decade, CMS spokesman Aaron Albright told USA Today. Under the rule, CMS expects to see reductions in fraud, waste, abuse, non-fraudulent improper payments and unnecessary requests for equipment.

Some groups, such as Washington-based Advanced Medical Technology Association, argue prior authorization could prove cumbersome to healthcare providers and lead to harmful equipment delays for seniors and disabled patients.

However, CMS does not expect delays to be an issue. Either CMS or a review contractor will make a "reasonable effort to render an initial prior authorization determination within 10 business days," according an official statement from CMS.

CMS plans to initially implement prior authorization for 135 items on a master list of supplies.

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