On Tuesday, the U.S. Centers for Medicare and Medicaid Services (CMS) announced that prior authorization will be required before Medicare will pay for high fraud items, such as wheelchairs, prosthetics, orthotics and other medical equipment.
The rule could save Medicare $580 million over the next decade, Aaron Albright, spokesman for CMS said. Additionally, the rule will not require doctors to file new paperwork, but instead, file the currently required paperwork sooner.
Other groups argue that the new rule is cumbersome and will result in significant delays, which could result in quality-of-life issues.
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CMS officials say the new rule grew out of longstanding concerns about improper payments for such equipment. Reports by the U.S. Department of Health and Human Services’ Office of the Inspector General and the U.S. Government Accountability Office question billing practices of suppliers, inappropriate payments and unnecessary use of these items. CMS officials say they responded to these reports with a competitive bidding program and greater screening of suppliers.
The government also launched large-scale stings. In 2011, federal investigators charged 91 people in eight cities with attempting to bilk Medicare out of $295 million. The cases included two people in Houston charged with $62 million in false billings for home health care and durable medical equipment.
But despite the crackdowns, the problems have persisted. An October report by the non-profit Council for Medicare Integrity found that billing for durable medical equipment “has consistently had an incredibly high rate of billing errors, frequently billed incorrectly at a higher rate, causing an overpayment.”
In the 2014 fiscal year, the report said, the error rate among durable medical equipment billing was 53.1%, which accounted for $5 billion in improper payments that year.
Medicare spent $6.3 billion on durable medical equipment last year, according to the Medicare Payment Advisory Commission.
Photo by Crystian Cruz via Flickr CC License
