CMS Announces Delay to the Prepayment Review and Prior Authorization for PMDs Demonstration and the Recovery Audit Prepayment Review Demonstration

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News from CMS.

On November 15, 2011 CMS announced three demonstration projects. The CMS plans to conduct these demonstration projects to strengthen Medicare by aiming at eliminating fraud, waste, and abuse. Reductions in improper payments will help ensure the sustainability of the Medicare Trust Funds and protect beneficiaries who depend upon the Medicare program.

The CMS received many comments/suggestions on the Prepayment Review and Prior Authorization of Power Mobility Devices (PMDs) demonstration and the Recovery Audit Prepayment Review demonstration. The CMS is considering these comments carefully. Therefore, CMS will delay implementation of these demonstrations. CMS will provide at least 30 days notice before the demonstrations begin.

Demonstration Descriptions

Prior Authorization of Power Mobility Devices (PMDs): Will implement a Prior Authorization process for scooters and power wheelchairs for all people with Medicare who reside in seven states with high populations of fraud- and error-prone providers (CA, IL, MI, NY, NC, FL and TX). This demonstration will help ensure that a beneficiary's medical condition warrants their medical equipment under existing coverage guidelines. Moreover, the program will assist in preserving a Medicare beneficiary's right to receive quality products from accredited suppliers. This demonstration is delayed until further notice.

Contact: PAdemo@cms.hhs.gov

Part A to Part B Rebilling: Will allow hospitals to rebill for 90 percent of the Part B payment when a Medicare contractor denies a Part A inpatient short stay claim as not reasonable and necessary due to the hospital billing for the wrong setting. Currently, when outpatient services are billed as inpatient services, the entire claim is denied in full. This demonstration will be limited to a representative sample of 380 hospitals nationwide that volunteer to be part of the program. This demonstration will allow hospitals to resubmit claims for 90 percent of the allowable Part B payment when a Medicare Administrative Contractor, Recovery Auditor, or the Comprehensive Error Rate Testing Contractor finds that a Medicare patient met the requirements for Part B services but did not meet the requirements for a Part A inpatient stay. In addition, this demonstration is expected to lower the appeals rate which will protect the trust fund and reduce hospital burden. Beneficiaries will be held harmless with respect to changes in hospital coinsurance liability. For more information about the demo, click on the link on the left. This demonstration begins January 1, 2012.

Contact: ABRebillingDemo@cms.hhs.gov

Recovery Audit Prepayment Review: Will allow Medicare Recovery Auditors (RACs) to review claims before they are paid to ensure that the provider complied with all Medicare payment rules. The RACs will conduct prepayment reviews on certain types of claims that historically result in high rates of improper payments. These reviews will focus on seven states with high populations of fraud- and error-prone providers (FL, CA, MI, TX, NY, LA, IL) and four states with high claims volumes of short inpatient hospital stays (PA, OH, NC, MO) for a total of 11 states. This demonstration will also help lower the error rate by preventing improper payments rather than the traditional "pay and chase" methods of looking for improper payments after they occur. This demonstration is delayed until further notice.

Contact: RAC@cms.hhs.gov