How Congress Wants to Modify the PMD Prior Authorization Program

One of the many issues considered as a part of fixing the flawed physician payment formula or Sustainable Growth Rate, also known as the doc fix, is a provision to expand the power mobility device (PMD) prior authorization demonstration. While there were some initial problems with the demonstration that began in fall 2012, Medicare did improve certain aspects of the program and it appears to be working well generally, according to PMD providers. Why is Congress looking to include this provision and what would the changes mean to the industry? Let’s first look at the demonstration. The Prior Authorization Demo Project currently in place is applicable for orders written after Sept. 1, 2012 for POVs, all Group 1 and 2 PWCs (K0813-K0843) and Group 3 PWCs with no power seating (K0848-K0855) in California, Florida, Illinois, Michigan, New York, North Carolina and Texas. However, Group 3 complex rehabilitative power wheelchairs with power options (K0856-K0864) are excluded from the demonstration. The demonstration is scheduled to continue until fall 2015, unless Congress or CMS take action to modify it. Under the demonstration, the provider or physician is required to submit all relevant documentation to the Durable Medical Equipment Medicare Administrative Contractor (DMEMAC) for review and a decision within 10 business days for initial submissions and 20 business days for resubmission as to whether the beneficiary meets all Medicare coverage requirements for a PMD. Also, there is a rarely used mechanism that allows for an expedited 48-hour review, in emergency situations where a practitioner indicates clearly, with supporting rationale, that the 10 business day time frame for a decision could jeopardize the beneficiary’s life or health. While the demonstration still does not totally resemble the process used by most state Medicaid programs and private insurance companies, feedback from the provider community involved in the program has been quite positive. Why is Congress pursuing an expansion? The key committees in the Senate and House are interested in including an expansion of the program in the doc fix due to the millions of dollars in savings they believe can be achieved. While the exact score has not been calculated by the CBO at press time, this recommendation is included in a much larger fraud and abuse prevention provision in the President’s FY 2015 Budget proposal, which is estimated to save $1.1 billion in 10 years. Clearly, the cost savings is a primary driver on this in the eyes of Congress, who is looking to pay for a permanent fix for physicians and other health care priorities. Congress has heard from providers in the demonstration states that their experiences have been relatively positive and that they would support expanding the program and making it permanent with a few modifications. What would the provision do, specifically? The language provided to the Senate Finance Committee in response to the interest in making the demonstration permanent would expand the current program in two fundamental ways. First, it would expand PMD prior authorization to all 50 states. Second, it would expand the scope of the program to include the Group 3 complex rehab base codes (excluded in demonstration) and the options and accessories that are billed with PMD bases. Such an expansion has the support of AAHomecare, NCART and other stakeholder organizations, including consumer groups. The industry language would require the Secretary of Health and Human Services to develop a comprehensive medical necessity evaluation form for physicians and develop and approve an online process for prior authorization of PMDs. Industry support for the expansion has been strong. Obtaining prior approval from Medicare would go a long way toward addressing other industry challenges within the PMD sector and more broadly within the industry. It sure is nice to be in a position where we can advance a commonsense provision in legislation that moves the industry forward in a substantive way that is supported by Congress and the Administration. Is there a lesson here?