CMS's Focus on DMEPOS Fraud and Abuse Risks Continues

by Foley & Lardner LLP

The focus by the Centers for Medicare & Medicaid Services (CMS) on Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) as an area rife with unnecessary utilization and a high improper payment rates continues. CMS on May 28, 2014 published in the Federal Register a proposed rule to greatly expand prior authorization reviews for certain DMEPOS items as a safeguard to mitigate these risks.

As some of the DMEPOS suppliers reading this are aware and have experienced, there currently exists a limited CMS pilot project that requires prior authorization reviews of power mobility devices in seven states. CMS now proposes to essentially expand a variation of that program to all states, while at the same time greatly expanding the number and types of DMEPOS implicated. While the documentation required to be prepared and retained by a DMEPOS suppliers has not changed, the supplier will now be required to submit such documentation to the appropriate CMS contractor for authorization prior to delivery of the DMEPOS item to a Medicare beneficiary.

Some of the highlights of the proposed rule are:

• CMS will create a Master List of DMEPOS that have appeared appear in a historical OIG or GAO report addressing DMEPOS with high rates of fraud or unnecessary utilization, or listed in an annual Comprehensive Error Rate Testing report, and which have either an average purchase fee of at least $1,000 or an average monthly rent of at least $100. CMS will select items from this Master List to create a “Required Prior Authorization List” of DMEPOS items.

• The denial of a prior authorization request will not be considered an initial determination of a claim for payment and, consequently, will not be appealable.

• The contractors will have ten days to review and either approve or deny an initial prior authorization request (there is also a proposed two day expedited review process in the event a ten day review will present a risk of “serious jeopardy to life or health”).

• The approval of a prior authorization will be a condition of payment. Don’t obtain it, you don’t get paid.

• A supplier may issue an advanced beneficiary notice (ABN) to a beneficiary, thereby shifting payment liability in the event of the denial of an authorization request, however, the ABN process will follow existing ABN rules and may not be used to bypass the prior authorization process or routinely issued by the supplier.

There are several areas of the proposed rule that I believe could present some challenges to suppliers. The first is the fact that the list of items subject to prior-authorization will not be a uniform national list, but instead will be regionalized based on where CMS sees pockets of abuse specific to certain DMEPOS. When coupled with the fact that the rule follow the state of residence of the beneficiary (and not the location of the DMEPOS supplier itself) one can only expect there to be confusion, challenges and required prior authorizations not requested. The second concern is the length of time permitted for the contractor to review each request. If I am the patient, I will not want to wait ten days (plus however long it takes for the request to be prepared and submitted) to get an item that I might need now, save for the few instance where life or health may be in serious jeopardy allowing for the expedited review. Finally, one also wonders if this review process could result in logistical challenges for hospital discharges where the patient might need the item to safely head home.

As with most proposed rules, CMS solicits stakeholder comments. In particular it seeks comments on the following issues:

• The number of items selected for initial/future implementation and how often the list should be updated?

• How many times a denied prior authorization can be resubmitted?

• The timeframes for review of prior authorization requests (initial, expedited and resubmitted)?

You can review the proposed rule and if you are interested in providing comments to CMS in response to its questions above, or any other matter addressed in the proposed rule, you must do so by July 28, 2014.

View This Blog


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Foley & Lardner LLP | Attorney Advertising

Written by:

Foley & Lardner LLP

Foley & Lardner LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.