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Under Medicare, preauthorization now required for durable medical equipment

For individuals who are age 65 and older or who are permanently disabled, Medicare provides vital health insurance coverage to help pay for doctor visits, medical procedures, hospital stays, physical therapy, prescription drugs and medical equipment. According to The Henry J. Kaiser Family Foundation, during 2014, Medicare spending totaled $597 billion and accounted for 14 percent of the federal government’s total budget. Additionally, during 2013, Medicare spending accounted for “22 percent of national health spending, 26 percent of spending on hospital care, and 22 percent of spending on physician services.”

While most politicians and healthcare providers agree that Medicare is a vital program, they often disagree about the scope and need for many of the regulatory rules that are imposed on healthcare providers and facilities under Medicare with regard to authorization, payments and reimbursements. One recent and controversial change that was instituted by the Centers for Medicare & Medicaid Services relates to the preauthorization for reimbursement of the costs associated with durable medical equipment or DME.

According to the Council for Medicare Integrity, during fiscal year 2014, Medicare reportedly paid out $5 billion in improper payments related to DME. In an effort to reduce the number of fraudulent and unnecessary DME reimbursement claims, physicians will now be required to obtain authorization and approval prior to any Medicare reimbursements being issued.

While proponents of this rule change argue it “could save Medicare $10 million within the first year,” alone, doctors and other healthcare professionals worry that the requirement of obtaining preauthorization will ultimately come at a cost to patients’ health, safety and satisfaction.

For a patient who is in need of a wheelchair or prosthetic, the Centers for Medicare & Medicaid Services’ pledge to issue a determination “within 10 business days,” likely provides little comfort. Physicians, who have questions or concerns about compliance issues surrounding this new rule, would be wise to consult with an attorney.

Source: Becker Hospital Review, “New CMS prior authorization rule could save Medicare $580M,” Brooke Murphy, Dec. 30, 2015

Becker Hospital Review, “How will the DME prior authorization rule affect revenue cycles?,” Brooke Murphy, Dec. 30, 2015

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