CMS demo targets power mobility devices

Tuesday, November 15, 2011

BALTIMORE - CMS yesterday announced new demonstration projects aimed at curbing improper Medicare and Medicaid payments, including a plan to require prepayment reviews and prior authorizations for power mobility devices.

Beginning Jan. 1, 2012, claims for power mobility devices (PMDs) in seven states will undergo a prepay review process during the first phase of a three-year demonstration. Claims for PMDs will require a prior authorization before the supplier can submit a claim in the second phase of the demo. CMS estimates about 325,000 PMD claims will be affected by the combined prepay review and prior authorization process.

The seven states included in the demo are California, Texas, Florida, Michigan, Illinois, North Carolina and New York. These states accounted for 43% of the total $606 million in Medicare expenditures for PMDs in 2010.

Another demo: A Recovery Audit Prepayment Review in which Medicare Recovery Auditors (RACs) will review selected claims before they are paid to ensure that suppliers complied with payment rules. RACs and administrative costs will be paid from money CMS saves by denying improperly billed claims.

This demonstration will be implemented in California, Texas, Florida, Michigan, New York, Louisiana and Illinois, based on their high levels of fraudulent claims; and in Pennsylvania, Ohio, North Carolina and Missouri, based on their high claims volumes for short inpatient hospital stays.

CMS also released the 2011 Medicare improper payment error rate for fee-for-service: 8.6%. It stated home medical equipment comprises 61% of that error rate.

In 2010, President Obama announced three goals for cutting improper payments: reduce overall payment errors by $50 billion; cut the Medicare fee-for-service error rate in half; and recover $2 billion in improper payments.