[Federal Register Volume 85, Number 28 (Tuesday, February 11, 2020)]
[Rules and Regulations]
[Pages 7666-7668]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-02644]



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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 414

[CMS-6080-N3]


Medicare Program; Update to the Required Prior Authorization List 
of Durable Medical Equipment, Prosthetics, Orthotics, and Supplies 
(DMEPOS) Items That Require Prior Authorization as a Condition of 
Payment

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

ACTION: Update to list and phases.

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SUMMARY: This document announces the continuation of prior 
authorization for 45 Healthcare Common Procedure Coding System (HCPCS) 
codes on the Required Prior Authorization List of DMEPOS Items that 
require prior authorization as a condition of payment, as well as the 
addition of six HCPCS codes to this list. Prior authorization for the 
additional codes will be implemented in two phases.

DATES: Phase one of implementation is effective on May 11, 2020. Phase 
two of implementation is effective on October 8, 2020.

FOR FURTHER INFORMATION CONTACT: Tara Bramhall, (410) 786-8256. Erica 
Ross, (410) 786-7480.

SUPPLEMENTARY INFORMATION:

I. Background

    Sections 1832, 1834, and 1861 of the Social Security Act (the Act) 
establishes that the provision of durable medical equipment, 
prosthetics, orthotics, and supplies (DMEPOS) are covered benefits 
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 and supplies 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, 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.
    On November 8, 2019, CMS published a final rule (84 FR 60648) 
titled ``Medicare Program; End-Stage Renal Disease Prospective Payment 
System, Payment for Renal Dialysis Services Furnished to Individuals 
with Acute Kidney Injury, End-Stage Renal Disease Quality Incentive 
Program, Durable Medical Equipment, Prosthetics, Orthotics and Supplies 
(DMEPOS) Fee Schedule Amounts, DMEPOS Competitive Bidding Program (CBP) 
Amendments, Standard Elements for a DMEPOS Order, and Master List of 
DMEPOS Items Potentially Subject to a Face-to-Face Encounter and 
Written Order Prior to Delivery and/or Prior Authorization 
Requirements.'' Through this rule we harmonized the lists of DMEPOS 
items created by former rules and established one ``Master List of 
DMEPOS Items Potentially Subject to Face-To-Face Encounter and Written 
Orders Prior to Delivery and/or Prior Authorization Requirements'' (the 
``Master List''). This rule was effective January 1, 2020.

II. Provisions of the Document

    In the November 8, 2019, final rule (84 FR 60648), we stated that 
the items currently subject to prior authorization would be 
grandfathered into the prior authorization program until the 
implementation of the first Required Prior Authorization List published 
subsequent to this rule, to avoid the administrative and stakeholder 
burdens associated with the termination of the current prior 
authorization program and the implementation of a revised program 
created under this rule. This rule also maintained the process 
established in the December 30, 2015, final Rule that when items are 
placed on the Required Prior Authorization List, we would inform the 
public of those DMEPOS items on the Required Prior Authorization List 
in the Federal Register with no less than 60 days' notice before 
implementation, and post notification on the CMS website (84 FR 60753).
    The Required Prior Authorization List specified in Sec.  
414.234(c)(1) is selected from the Master List (as described in Sec.  
414.234(b)), and those selected items 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 all 45 
Power Mobility Device (PMD) and Pressure Reducing Support Services 
(PRSS) HCPCS codes currently on the Required Prior Authorization List 
will continue to be subject to the requirements of prior authorization 
(see 81 FR 93636, 83 FR 25947, and 84 FR 16616). In addition, we are 
updating the Required Prior Authorization List to include six Lower 
Limb Prosthetic (LLP) HCPCS codes. To assist stakeholders in preparing 
for implementation of the prior authorization program, we are providing 
90 days' notice.
    The following six HCPCS codes for LLPs are added to the Required 
Prior Authorization List:

------------------------------------------------------------------------
            HCPCS                             Description
------------------------------------------------------------------------
L5856.......................  Addition to lower extremity prosthesis,
                               endoskeletal knee-shin system,
                               microprocessor control feature, swing and
                               stance phase, includes electronic
                               sensor(s), any type.
L5857.......................  Addition to lower extremity prosthesis,
                               endoskeletal knee-shin system,
                               microprocessor control feature, swing
                               phase only, includes electronic
                               sensor(s), any type.
L5858.......................  Addition to lower extremity prosthesis,
                               endoskeletal knee-shin system,
                               microprocessor control feature, stance
                               phase only, includes electronic
                               sensor(s), any type.
L5973.......................  Endoskeletal ankle foot system,
                               microprocessor controlled feature,
                               dorsiflexion and/or plantar flexion
                               control, includes power source.
L5980.......................  All lower extremity prostheses, flex foot
                               system.
L5987.......................  All lower extremity prosthesis, shank foot
                               system with vertical loading pylon.
------------------------------------------------------------------------

    We believe prior authorization of these six additional HCPCS codes 
for LLPs will help further our program integrity goals of reducing 
fraud, waste, and abuse, while also protecting access to care. LLPs 
have been identified by

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CMS' Comprehensive Error Rate Testing (CERT) program as one of the top 
20 DMEPOS service types with improper payments over the past several 
years.\1\ The 2018 Medicare Fee-for-Service Supplemental Data reported 
over $46 million in projected improper payments for LLPs.\2\ 
Additionally, the Office of Inspector General (OIG) has previously 
reported that Medicare has inappropriately paid for LLPs that did not 
meet certain Medicare requirements.\3\
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    \1\ https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/CERT/CERT-Reports.html?DLSort=0&DLEntries=10&DLPage=1&DLSortDir=descending.
    \2\ https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/CERT/Downloads/2018MedicareFFSSuplementalImproperPaymentData.pdf.
    \3\ https://oig.hhs.gov/oei/reports/oei-02-10-00170.pdf.
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    These codes will be subject to the requirements of the prior 
authorization program for certain DMEPOS items as outlined in Sec.  
414.234. We will implement a prior authorization program for the six 
newly added codes for LLPs in two phases. This phased-in approach will 
allow us to identify and resolve any unforeseen issues by using a 
smaller claim volume in phase one before nationwide implementation 
occurs in phase two. In phase one of implementation, which begins on 
the date specified in the DATES section, we will limit the prior 
authorization requirement to one state in each of the four DME Medicare 
Administrative Contractors (MAC) geographic jurisdictions as follows: 
California, Michigan, Pennsylvania, and Texas. In phase two, which 
begins on the date specified in the DATES section of this document, we 
will expand the program to the remaining states in all four DME MAC 
jurisdictions. The prior authorization program for the 45 codes 
currently subject to the DMEPOS prior authorization requirement will 
remain in place uninterrupted in all states.
    Prior to furnishing the item to the beneficiary and submitting the 
claim for processing, a requester must submit a prior authorization 
request. The request must include 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 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 (80 FR 81692), 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. For example, we will review questions and 
complaints from consumers and providers that come through regular 
sources such as 1-800-Medicare.
    The updated Required Prior Authorization list is available in the 
download section of the following CMS website: https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/DMEPOS/Prior-Authorization-Process-for-Certain-Durable-Medical-Equipment-Prosthetic-Orthotics-Supplies-Items.html.

III. Collection of Information Requirements

    This document announces the continuation of prior authorization for 
45 HCPCS codes, and the addition of six HCPCS codes for LLPs on the 
Required Prior Authorization List and does not impose any new 
information collection burden under the Paperwork Reduction Act of 
1995. However, there is an information collection burden associated 
with this program that is currently approved under OMB control number 
0938-1293 which expires March 31, 2022.

IV. Regulatory Impact Statement

    We have examined the impact of this action as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 
1980, Pub. L. 96-354), section 1102(b) of the Act, section 202 of the 
Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4), 
Executive Order 13132 on Federalism (August 4, 1999), the Congressional 
Review Act (5 U.S.C. 804(2)), and Executive Order 13771 on Reducing 
Regulation and Controlling Regulatory Costs (January 30, 2017).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). A 
regulatory impact analysis (RIA) must be prepared for major rules with 
economically significant effects ($100 million or more in any 1 year). 
This document does not reach the economic threshold and, thus, is not 
considered a major rule.
    The RFA requires agencies to analyze options for regulatory relief 
of small entities. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and small governmental 
jurisdictions. Most hospitals and most other providers and suppliers 
are small entities, either by nonprofit status or by having revenues of 
less than $7.5 million to $38.5 million in any one year. Individuals 
and states are not included in the definition of a small entity. We are 
not preparing an analysis for the RFA because we have determined, and 
the Secretary certifies, that this document will not have a significant 
economic impact on a substantial number of small entities.
    In addition, section 1102(b) of the Act requires us to prepare an 
RIA if a rule may have a significant impact on the operations of a 
substantial number of small rural hospitals. This analysis must conform 
to the provisions of section 604 of the RFA. For purposes of section 
1102(b) of the Act, we define a small rural hospital as a hospital that 
is located outside of a Metropolitan Statistical Area for Medicare 
payment regulations and has fewer than 100 beds. We are not preparing 
an analysis for section 1102(b) of the Act because we have determined, 
and the Secretary certifies, that this action will not have a 
significant impact on the operations of a substantial number of small 
rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any one year of 
$100 million in 1995 dollars, updated annually for inflation. In 2019, 
that threshold is approximately $154 million. This action will have no 
consequential effect on state, local, or tribal governments or on the 
private sector.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final

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rule) that imposes substantial direct requirement costs on state and 
local governments, preempts state law, or otherwise has federalism 
implications. Since this action does not impose any costs on state or 
local governments, the requirements of Executive Order 13132 are not 
applicable.
    Executive Order 13771, titled Reducing Regulation and Controlling 
Regulatory Costs, was issued on January 30, 2017 and requires that the 
costs associated with significant new regulations ``shall, to the 
extent permitted by law, be offset by the elimination of existing costs 
associated with at least two prior regulations.'' OMB's interim 
guidance, issued on April 5, 2017, https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/memoranda/2017/M-17-21-OMB.pdf, explains that 
for Fiscal Year 2017 the above requirements only apply to each new 
``significant regulatory action that imposes costs.'' It has been 
determined that this document is not a ``significant regulatory 
action'' and thus does not trigger the aforementioned requirements of 
Executive Order 13771.
    In accordance with the provisions of Executive Order 12866, this 
document was reviewed by the Office of Management and Budget.

    Dated: November 5, 2019.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.

    Editorial note: This document was received for publication by 
the Office of the Federal Register on February 5, 2020.

[FR Doc. 2020-02644 Filed 2-7-20; 11:15 am]
BILLING CODE 4120-01-P