j-Colagiovannij-langeOn Nov. 15, 2011 the Centers for Medicare & Medicaid Services (CMS) unveiled the Prior Authorization of Power Mobility Devices (PMD) Demonstration Program. After the announcement many affected providers and suppliers expressed to CMS concerns that the demonstration program, and particularly the pre-payment review phase, would be detrimental to suppliers’ businesses. Industry leaders collaborated to communicate these concerns, resulting in members of Congress sending letters requesting that the CMS delay the program’s implementation. The industry’s efforts ultimately were effective, and on Dec. 29, 2011 CMS announced that the launch of the program was being postponed indefinitely. In early February CMS released a statement indicating that the demonstration program’s implementation would take effect on or after June 1, 2012, but with important changes from the initial design.

As originally and currently intended, the PMD demonstration will implement a prior authorization process covering scooters and power wheelchairs for all Medicare beneficiaries in seven states with what CMS has described as high numbers of fraudulent and error-prone providers (California, Illinois, Michigan, New York, North Carolina, Florida and Texas). CMS’s stated goal for the demonstration is to reduce the number of improper payments connected to PMDs, a process that will aid in further ensuring the sustainability of the Medicare trust funds and ultimately provide protection for Medicare beneficiaries. In addition, CMS believes that the demonstration will go a long way toward achieving three key objectives, which include:

1) Developing and demonstrating improved methods for the investigation and prosecution of fraud in the provision of care or services rendered under the healthcare programs established by the Social Security Act;

2) Ensuring that PMDs are warranted by beneficiaries’ medical conditions under existing coverage guidelines; and

3) Assisting in the preservation of beneficiaries’ ability to receive quality products from accredited suppliers.

CMS believes that the implementation of this demonstration will provide an opportunity to reduce waste and abuse. CMS bases this belief on the fact that PMDs are expensive and have a history of fraud and abuse issues. In response to these concerns, the prior authorization process requires that relevant documentation for review must be submitted before items are delivered. The following items, when paid for by Medicare, are subject to the prior authorization process:

  • All power-operated vehicles (K0800-K0805 and K0809-K0812);
  • All standard power wheelchairs (K0813 thru K0829);
  • All Group 2 complex rehabilitative power wheelchairs (K0835 thru K0843);
  • All Group 3 complex rehabilitative power wheelchairs without power options (K0848 thru K0855);
  • All pediatric and Group 4 power wheelchairs (K0887 thru K0891); and
  • Miscellaneous power wheelchairs (K0898).
  • Group 3 complex rehabilitative power wheelchairs with power options (K0856 thru K0864) are excluded.

As discussed above, in response to provider and supplier concerns CMS made a number of significant modifications to the PMD demonstration. First, the agency eliminated the 100 percent pre-payment review phase (formerly known as Phase 1) due to the financial impact this review likely would have had on suppliers. Next, because ordering physicians may not be in the best position to submit prior authorization requests, CMS will allow suppliers to perform the administrative function of submitting these requests on behalf of physicians or treating practitioners.  Finally, CMS completed a separate Paperwork Reduction Act (PRA) notification for the PMD demonstration in response to heightened concerns regarding the limited notice given prior to the proposed start date.

CMS announced that it will not begin the demonstration until an Office of Management and Budget (OMB) PRA number is obtained (this is anticipated to be completed ahead of the tentative launch date). In addition, CMS will provide a process through which physicians and suppliers will be able to provide comments and make recommendations on how to reduce the paperwork burden associated with this demonstration; the agency will be accepting feedback during a 60-dayperiod that subsequently will be followed by a 30-day period during which the OMB will be accepting feedback. Demonstration states also now will start prior authorization at approximately the same time instead of engaging in a staggered implementation as initially planned.


CMS intends to conduct extensive education and outreach before and during the demonstration program in order to make all of the demonstration requirements clear for ordering physicians, practitioners, suppliers and beneficiaries. It is important for providers and suppliers to become familiar with the new prior authorization process requirements for PMDs in order to avoid potential nonpayment by Medicare or becoming suspected of fraud. Therefore, providers and suppliers should implement an effective compliance plan to reduce the inherent compliance risks associated with the Prior Authorization PMD Demonstration Program.

About the Authors

Jennifer Colagiovanni is an attorney at Wachler & Associates, P.C.  Ms. Colagiovanni graduated with Distinction from the University of Michigan and Cum Laude from Wayne State University Law School.  Upon graduation, Ms. Colagiovanni was nominated to the Order of the Coif. Ms. Colagiovanni devotes a substantial portion of her practice to defending Medicare and other third party payer audits on behalf of providers and suppliers.  She is a member of the State Bar of Michigan Health Care Law Section.

Jessica Lange is an associate at Wachler & Associates, P.C.  Ms. Lange dedicates a considerable portion of her practice to defending healthcare providers and suppliers in the defense of RAC, Medicare, Medicaid and third party payer audits.  Her practice also includes the representation of clients in Stark, anti-kickback, and fraud and abuse matters.

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