Update on PMD demo: Spending drops 50%

Tuesday, April 30, 2013

BALTIMORE – Spending on power mobility devices (PMDs) has taken a nosedive ever since CMS implemented a demonstration project that requires providers to submit prior authorization requests before supplying equipment.

In an update posted April 23, CMS indicates that spending per month on PMDs in seven demo states fell about 50%, from about $15 million in January 2012 to $7 million in December 2012. In non-demo states, spending also fell, from about $23 million in January 2012 to about $17 million in December 2012.

“We believe many national suppliers have adjusted their billing practices nationwide and are now complying with CMS policies based on their experiences with prior authorization in the demonstration states,” the update states.

CMS kicked off the demo in September 2012 in seven states: California, Illinois, Michigan, New York, North Carolina, Florida and Texas.

As of March 2013, CMS says prior authorization requests have been submitted for more than 12,000 Medicare beneficiaries. About half of those requests did not qualify for the benefit. CMS says of those 12,000 requests, 700 were submitted electronically.

Also included in the update:

•    CMS says its contractors are conducting reviews of prior authorizations in a timely manner: no more than 10 business days for initial submissions and 20 business days for resubmissions.

•    CMS says industry feedback has been positive thus far. Several providers have suggested the process provides a more predictable cash flow. These providers would like the process to be expanded to other states and equipment.

•    CMS says it has received no complaints from beneficiaries.

“CMS will continue to closely monitor and evaluate the effectiveness of the demonstration,” the update states. “CMS plans to analyze demonstration data to assist in the investigation and prosecution of fraud.”