Beneficiaries in Original Medicare (also known as fee-for-service Medicare) and living in the states of California, Florida, Illinois, Michigan, New York, North Carolina and Texas have been, beginning with September 1, 2012, included in a “demonstration project” which is designed to curb the fraudulent supplying of power mobility devices. A demonstration project is a temporary effort in which Medicare can try new and different but limited approaches to the Medicare program, such as delivering care in new ways, testing different reimbursement methodologies, seeing if a new type of Medicare Advantage Plan will work, and so forth.
The devices involved in this demonstration include almost all power wheelchairs and power operated vehicles such as scooters. Medicare believes that in some areas of the country these types of items are at times improperly or fraudulently supplied. So if you are an Original Medicare beneficiary and live in one of these seven states, and are thinking of acquiring one of these devices, read on. (And by “live in,” we mean that your residence address on the Social Security Administration (SSA) records is in one of these states. Medicare does not keep up on your residence address, but uses SSA’s records. You can check on your SSA address or change it by calling 1-800-772-1213. Railroad (RRB) beneficiaries should call 1-877-772-5772).
Under this demonstration, physicians or practitioners who prescribe these devices or the suppliers of these devices may submit a prior authorization request to the appropriate Durable Medical Equipment (DME) Medicare Administrative Contractor (MAC) requesting prior authorization of the equipment. (These “DMEMACs“ are the companies Medicare contracts with to process Medicare DME claims.) Prior authorization, sometimes known as “prior approval” or “pre-certification,” exists in many other public and private health care programs, and is not uncommon in some Medicare Advantage Plans, but is almost unheard of in Original Medicare. And whether or not they submit the prior authorization, your physician or practitioner will have to have a face-to-face examination of you, and they can even get some reimbursement from Medicare for submitting the prior authorization request paperwork.
If such a prior authorization request is submitted, the contractor will try to make a decision on the request within 10 business days. And if you have an unusual but extremely urgent need for the equipment, your physician or practitioner can ask for a 48-hour decision.
If the prior request is approved, and the supplier delivers the equipment to the beneficiary, the contractor will approve and pay the claim at the normal reimbursement amount. If the request is not approved, it can be resubmitted with additional information, but cannot be formally appealed.
If the request is not approved, the supplier can deliver the equipment to the beneficiary and submit a claim. These claims will all be formally denied, and all the normal appeal rights will kick in.
If, on the other hand, the supplier submits a claim for such a device without first seeking prior authorization, the contractor will suspend the claim and send a request to the supplier asking for information to show whether or not it should be covered. If this information is not submitted, or if it shows the device is not medically necessary, the claim will be formally denied. In this case the beneficiary’s normal appeal rights will kick in. If the information is submitted and it shows the device is necessary, the claim will be approved BUT PAID AT 25 PERCENT LESS than the normal approved amount if it is submitted by a “non-competitive bid supplier.”
(This 25% reduction provision does not go into effect until December 1, 2012. And not to get overly detailed, but Medicare is also running a different demonstration project in a number of metropolitan areas, including some in Florida, North Carolina and Texas, which generally require beneficiaries to use those suppliers who have won the competitive right to supply Medicare beneficiaries with certain items of durable medical equipment and supplies. Certain power mobility devices are included, so there is some overlap. If you reside in one of the three states just mentioned, you can call 1-800-MEDICARE to find out if you are in one of the metropolitan areas where the competitive bid supplier demonstration is running.)
Beneficiaries should be aware that if either the prior authorization is not given, or the physician, practitioner or supplier does not seek this, and the supplier asks the beneficiary to sign an Advance Beneficiary Notice (ABN) indicating that the item is not covered, the beneficiary will be liable for the cost of the item. And while the beneficiary may ask for delivery of the item and then appeal the denial, beneficiaries should be aware that unless they win the appeal, they will be fully liable for the cost of the item.
As demonstrations are limited, this prior authorization demonstration will expire on September 1, 2015.
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