[Federal Register Volume 81, Number 245 (Wednesday, December 21, 2016)]
[Rules and Regulations]
[Pages 93636-93637]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-30273]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 414

[CMS-6072-N]


Medicare Program; Implementation of Prior Authorization Process 
for Certain Durable Medical Equipment, Prosthetics, Orthotics, and 
Supplies (DMEPOS) Items and Publication of the Initial Required Prior 
Authorization List of DMEPOS Items That Require Prior Authorization as 
a Condition of Payment

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

ACTION: Implementation of list and phases.

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SUMMARY: This document announces the implementation of the prior 
authorization program for certain durable medical equipment, 
prosthetics, orthotics, and supplies (DMEPOS) items in two phases and 
the issuance of the initial Required Prior Authorization List of DMEPOS 
items that require prior authorization as a condition of payment.

DATES: Phase one of implementation is effective on March 20, 2017. 
Phase two of implementation is effective on July 17, 2017.

FOR FURTHER INFORMATION CONTACT: 
Jennifer Phillips, (410) 786-1023.
Linda O'Hara (410) 786-8347.
Scott Lawrence (410) 786-4313.

SUPPLEMENTARY INFORMATION:

I. Background

    Sections 1832, 1834, and 1861 of the Social Security Act (the Act) 
establish that the provision of durable medical equipment, prosthetic, 
orthotics, and supplies (DMEPOS) is a covered benefit under Part B of 
the Medicare program.
    Section 1834(a)(15) of the Act authorizes the Secretary to develop 
and periodically update a list of DMEPOS items that the Secretary 
determines, on the basis of prior payment experience, are frequently 
subject to unnecessary utilization and to develop a prior authorization 
process for these items.
    In the December 30, 2015 final rule (80 FR 81674), titled 
``Medicare Program; Prior Authorization Process for Certain Durable 
Medical Equipment,

[[Page 93637]]

Prosthetics, Orthotics, and Supplies'', we implemented section 
1834(a)(15) of the Act by establishing an initial Master List (called 
the Master List of Items Frequently Subject to Unnecessary Utilization) 
of certain DMEPOS that the Secretary determined, on the basis of prior 
payment experience, are frequently subject to unnecessary utilization 
and by establishing a prior authorization process for these items. The 
Master List is self-updating annually, and items remain on the Master 
List for 10 years from the date the item was added to the Master List. 
Items are removed from the list sooner than 10 years if the purchase 
amount drops below the payment threshold described later in this 
section. We will notify the public annually of any additions and 
deletions from the Master List by posting the notification in the 
Federal Register and on the CMS Prior Authorization Web site. The 
Master List includes items that meet the following criteria:
    ++ Appear on the DMEPOS Fee Schedule list.
    ++ Have an average purchase fee of $1,000 or greater (adjusted 
annually for inflation) or an average monthly rental fee schedule of 
$100 or greater (adjusted annually for inflation). (These dollar 
amounts are referred to as the payment threshold).
    ++ Meet either of the following criteria:
    --Identified in a Government Accountability Office (GAO) or 
Department of Health and Human Services Office of Inspector General 
(OIG) report that is national in scope and published in 2007 or later 
as having a high rate of fraud or unnecessary utilization.
    --Listed in the 2011 or later Comprehensive Error Rate Testing 
(CERT) program's Annual Medicare Fee-For-Service (FFS) Improper Payment 
Rate Report and/or the Supplementary Appendices for the Medicare Fee-
for-Service Improper Payments Report.

II. Provisions of the Document

    In the December 30, 2015 final rule (80 FR 81689), we stated that 
we would inform the public of those DMEPOS items on the Required Prior 
Authorization List in the Federal Register with 60-day notice before 
implementation. The Required Prior Authorization List specified in 
Sec.  414.234(c)(1) is selected from the Master List of Items 
Frequently Subject to Unnecessary Utilization (as described in Sec.  
414.234(b)(1)), and items on the Required Prior Authorization List 
require prior authorization as a condition of payment. Additionally, we 
stated that CMS may elect to limit the prior authorization requirement 
to a particular region of the country if claims data analysis shows 
that unnecessary utilization of the selected item(s) is concentrated in 
a particular region. The purpose of this document is to inform the 
public that we are implementing the prior authorization program for 
certain DMEPOS items and to provide the initial Required Prior 
Authorization List of DMEPOS items that require prior authorization as 
a condition of payment. To assist stakeholders in preparing for 
implementation of the prior authorization program, CMS is providing 90 
days' notice.
    The following two DMEPOS items, represented by HCPCS (Healthcare 
Common Procedure Coding System) codes K0856 and K0861 are added to the 
Required Prior Authorization List:
     K0856 HCPCS: Power wheelchair, group 3 standard, single 
power option, sling/solid seat/back, patient weight capacity up to and 
including 300 pounds.
     K0861 HCPCS: Power wheelchair, group 3 standard, multiple 
power option, sling/solid seat/back, patient weight capacity up to and 
including 300 pounds.
    Power wheelchairs, represented by HCPCS codes K0856 and K0861, will 
be subject to the requirements of the prior authorization program for 
certain DMEPOS items as outlined in Sec.  414.234. (We note that these 
Group 3 power wheelchairs are not part of the separate Prior 
Authorization of Power Mobility Devices (PMDs) Demonstration.)
    We will implement a national prior authorization program for K0856 
and K0861 in two phases, as specified in the DATES section of this 
document. We are implementing the program in this manner to test the 
new prior authorization program because new complex claims processing 
systems changes are required for implementation. This phased-in 
approach will allow us to identify and resolve any unforeseen issues by 
using a smaller claim volume in phase one before national 
implementation occurs in phase two.
    In phase one of implementation, which begins as specified in the 
DATES section of this document, we will limit the prior authorization 
requirement to one state in each of the four DME Medicare 
Administrative Contractors (MAC) geographic jurisdictions, as follows: 
Illinois, Missouri, New York, and West Virginia. Initially limiting the 
program to one state in each of the DME MAC geographic jurisdictions 
allows us to test the national claims processing system and the local 
DME MAC processes. In phase two, which begins as specified in the DATES 
section of this document, we will expand the program to the remaining 
states.
    Prior to furnishing the item to the beneficiary and prior to 
submitting the claim for processing, a requester must submit a prior 
authorization request that includes evidence that the item complies 
with all applicable Medicare coverage, coding, and payment rules. 
Consistent with Sec.  414.234(d), such evidence must include the order, 
relevant information from the beneficiary's medical record, and 
relevant supplier-produced documentation. After receipt of all 
applicable required Medicare documentation, CMS or one of its review 
contractors will conduct a medical review and communicate a decision 
that provisionally affirms or non-affirms the request.
    We will issue specific prior authorization guidance in 
subregulatory communications, including final timelines, which are 
customized for the DMEPOS item subject to prior authorization, for 
communicating a provisionally affirmed or non-affirmed decision to the 
requester. In the December 30, 2015 final rule, we stated that this 
approach to final timelines provides flexibility to develop a process 
that involves fewer days, as may be appropriate, and allows us to 
safeguard beneficiary access to care. If at any time we become aware 
that the prior authorization process is creating barriers to care, we 
can suspend the program.

III. Collection of Information Requirements

    This document does not impose information collection requirements, 
that is, reporting, recordkeeping or third-party disclosure 
requirements. Consequently, there is no need for review by the Office 
of Management and Budget under the authority of the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501 et seq.).

    Dated: December 1, 2016.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2016-30273 Filed 12-19-16; 4:15 pm]
BILLING CODE 4120-01-P