Critics claim Medicare bungled new prosthetics prior authorization rule

Saving money and curbing fraud are laudable goals, but a new Medicare rule could leave patients with prosthetic devices with less than optimal choices — and could inspire private insurers to cut benefits, too.

How many human interest stories have there been about advances in prosthetic devices since the invention of the 3-D printer? How many lives have been changed for the better thanks to more sophisticated technology systems with sensors and microprocessors, even brain-computer interface technology, being used in prosthetic knees, ankles or elbows?

The Amputee Coalition reports that 1.6 million Americans have lost at least part of a limb, excluding fingers and toes. While 54 percent have lost limbs to diabetes and vascular disease, fully 45 percent have lost limbs to traumatic events.

A Medicare reimbursement rule went into effect on Feb. 29 that critics say will delay the process of getting amputees the prostheses that best suit their needs. The rule changes how the Centers for Medicare and Medicaid Services will determine eligibility for prosthetic limbs and other durable medical equipment.

CMS explains that this rule is the most recent action in its years-long effort to reduce unnecessary expenditures and fraud related to durable medical equipment, prosthetic, orthotics and supplies, or DMEPOS. So far, these efforts have focused on suppliers and their billing practices.

The agency explains, too, that the new process was tested in 19 states and showed remarkable results — as much as a 75 percent decrease in monthly expenditures. The demonstrations, however, only included power mobility devices. Reimbursement for prosthetics was not studied.

What changed?

Previously, a provider prescribed a prosthetic device to a Medicare patient and then submitted the claim for reimbursement. The advantage was that the patient received the necessary device quickly. The disadvantage came when a claim was denied: The patient had to pay for the device out-of-pocket or had to find a perhaps less effective alternative.

Under the new rule, providers must obtain authorization from CMS before a patient can obtain, for example, a prosthetic lower limb. CMS has classified DMEPOS based on their histories of “unnecessary utilization;” the more prone to unnecessary utilization a device is, the stricter the prior authorization process is.

To make it easier for providers (and insurance companies) to figure out what level of prior authorization a device must have, CMS has developed two lists. The “Master List” includes 135 items that, because of their utilization histories, may be subject to prior authorization. From that list, CMS has identified devices for the “Required Prior Authorization List.”

The lists

Items are added to the Master List annually and will remain there for 10 years. Items can fall off the list if they no longer meet the specified criteria. Items that cost less than $1,000 or rent for less than $100 are excluded from the Master List.

Not surprisingly, items on the Required Prior Authorization List will require prior authorization. CMS has promised to release the first list soon and will provide 60 days’ notice before the release of updated lists.

As good an idea as that is …

Faced with complaints that the new process will require providers to spend more time on documentation, CMS insists that the only change will be in timing. The same information regarding medical necessity will be submitted in advance of, rather than following the delivery of the DMEPOS device.

That may be true when it comes to getting the item to the patient. Providers say, however, that suppliers will come to them for help with the documentation required to keep certain items off the list.

Plus, the process allows CMS to grant a “provisional affirmation” or “provisional nonaffirmation” for the claim. CMS will pay a claim given a provisional affirmation but will deny a provisional nonaffirmation claim if no final decision has been made. CMS promises the authorization process will only take 10 business days, unless the provider requests expedited review, which will be granted under limited circumstances.

And there’s a catch

What concerns some providers and patients the most are new “local coverage determination” guidelines. Among them: Medicare will only cover a prosthesis that provides “the appearance of a natural gait,” and a patient must have “sufficient cardio-pulmonary capacity to effectively use the prosthesis at the determined functional level.”

The guidelines are too vague. A patient may not receive the most appropriate or most technologically advanced prosthesis based on an arbitrary measure of his gait or his cardio-pulmonary capacity.

For critics of the rule, CMS has made the ultimate mistake when it comes to health care coverage: It has failed to take the quality of the patient’s lives into account.

An impact beyond Medicare

Nearly 45 million seniors and 9 million people with disabilities are enrolled in Medicare. Granted, the rule will not affect all of them, but it’s important to note that private insurance companies often follow CMS’ lead when it comes to coverage guidelines. UnitedHealth Group, for example, has already pledged not to reimburse for DMEPOS that fall under the new rule. Prior authorization is not the issue here: The insurer explains that those items do not work any better than the (cheaper) alternative.

It is not clear if other national carriers or health insurers serving only California will adopt either the CMS rule or a rule akin to UHG’s.