CMS Releases Details of Fee-for-Service Recovery Audit Prepayment Review Demonstration and Prior Authorization Demonstration

On February 7, 2012, The Centers for Medicare and Medicaid Services (CMS) released a Request for Comments regarding two demonstration programs it intends to conduct.

The first, the Recovery Audit Prepayment Review Demonstration, will allow CMS and its agents to request additional documentation, including medical records, to support submitted claims. In Chapter 3 of the Program Integrity Manual, additional documentation includes any medical documentation, beyond what is included on the face of the claim that supports the item or service billed. When a contractor conducts a complex medical review, they specify the documentation they require in accordance with Medicare’s rules and policies. This supporting information and documentation may be requested by CMS and its agents on a routine basis in instances where diagnoses on a claim do not clearly indicate medical necessity, or if there is suspicion of fraud.

The second, Prior Authorization of Power Mobility Devices (PMD) Demonstration, will allow the applicable documentation that supports a claim to be submitted prior to delivery of the item. Relevant documentation for review will be submitted before the item is delivered or services rendered. This demonstration will be conducted in California, Florida, Illinois, Michigan, New York, North Carolina and Texas. A prior authorization request can be completed by the ordering physician or treating practitioner and submitted to the appropriate Durable Medical Equipment Medical Administration Contractor (DME MAC) for initial decision. The supplier may also submit the request on behalf of the physician or treating practitioner. The “submitter” will submit to DME MAC a request for prior authorization and all relevant documentation to support Medicare coverage of the PMD item.

For more information on this issue, please contact Abby Pendleton or Jessica Gustafson at (248) 996-8510 or visit

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