January 3, 2012

CMS Postpones Prepayment Review Demonstration

By

c-buckDuring the most recent holiday season — the season of giving — the Centers for Medicare & Medicaid Services (CMS) actually gave what could be construed as a holiday gift by taking something away.

On Dec. 28, 2011, CMS announced that it was delaying what many thought would be a contentious issue — the prepayment review demonstration. In the same announcement, CMS said it also was delaying the implementation of the Prior Authorization of Power Mobility Devices (PMDs) demonstration. The agency hastened to add that the Part A-to-Part B rebilling demonstration would remain as scheduled and would begin on Jan. 1, 2012.

Citing the fact that it had received many comments about both demonstration programs, the agency said that it would “consider these comments carefully” and that it would provide “at least 30 days notice before the demonstrations begin.”


The Pile-on


Among those who were challenging CMS on the two issues were 24 members of Congress, including veteran U.S. Reps. Charles Rangel (D-NY) and physician Michael C. Burgess (R-TX). In a Dec. 15, 2011 letter to acting CMS Administrator Marilyn Tavenner, the representatives cited efforts Congress made last year to reduce pricing for powered mobile devices (PMD) while at the same time increasing program integrity requirements for Medicare suppliers.


“On January 1, 2011, Congress mandated that all Medicare Group 2 standard power wheelchairs be converted to a 13-month rental item requiring businesses to obtain substantial outside capital,” the representatives wrote. “Including a demonstration project to the requirements in place could harm seniors that depend on durable medical equipment to live independently in their own homes.”


“We encourage you to halt the prepay review demonstration project due to the potential threats to businesses, jobs and seniors’ access care,” the letter read.
The correspondence appeared to lump the PMD prepayment demonstration with the inpatient Recovery Audit Prepayment Review demonstration.

On Dec. 29, 2011, the American Association of Homecare posted a news alert stating that, as a result of “intensive collaboration” with CMS and its organization (AAHomecare), CMS elected to delay the PMD demonstration. In its news alert, AAHomecare’s vice president of government affairs, Walt Gorski, was quoted as saying “we are pleased that CMS has taken a deep breath to better understand the power mobility sector and the impact that any widespread prepayment review would have on Medicare beneficiaries and homecare providers.”


The news alert stated that, when the program was announced by CMS on Nov. 15, 2011, the association began working with its members, physicians, consumers and members of the Complex Rehab and Mobility Council (CRCM) who would have been affected by the demonstration. 

Prior Authorization for PMDs

According to CMS, the Prior Authorization would affect scooters and power wheelchairs for Medicare beneficiaries in seven states the agency previously has identified as having large numbers of fraud- and error-prone providers: California, Illinois, Minnesota, New York, North Carolina, Florida and Texas. This demonstration, CMS noted, would have helped to ensure that a beneficiary's medical condition would warrant their medical equipment falling under existing coverage guidelines. Moreover, the program would assist in preserving a Medicare beneficiary's right to receive quality products from accredited suppliers, the agency said.

Prepayment Review Demonstration

As described by CMS, the Recovery Audit Prepayment Review would have allowed the RACs to review claims before they were paid to ensure that providers had complied with all Medicare payment rules. The RACs then would have conducted prepayment reviews on certain types of claims that historically have resulted in high rates of improper payments. 

In addition to the aforementioned California, Illinois, New York, Florida and Texas, CMS noted that these reviews also would have focused on the state of Louisiana. The agency also identified four states with high claims volumes of short inpatient hospital stays, naming Pennsylvania, Ohio, North Carolina and Missouri. A total of 11 states had been targeted for the demonstration, which since has been delayed until further notice.

“Considering the amount of time it takes to get to the Administrative Law Judge (ALJ) level of appeal — well over a year— it is good that the program is delayed,” Andrew Wachler, Esq., principal of Wachler & Associates, told RACmonitor. “And that’s because (of) the effect that prepayment review has on a hospital’s cash flow.”

Chuck Buck

Chuck Buck is the publisher of RACmonitor and is the program host and executive producer of Monitor Monday.

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