GAO recommends CMS continue, expand prior authorization, citing nearly $2 billion in savings

The Government Accountability Office (GAO) has urged CMS to renew prior authorization programs slated to expire. The GAO made its case for continuing the programs in a report released in April, arguing that the programs reduced spending by nearly $2 billion since 2012.

Although prior authorization is common among commercial payers, CMS did not have a similar program until 2012, when it began requiring prior authorization for power mobility devices. CMS considered prior authorization an experiment and set most of the programs up as fixed-length demonstrations. One notable exception is the prior authorization program for permanent durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) (group 3 power wheelchairs). That program was instituted in March 2017 and has no set end date.

Other prior authorization programs have already expired or will expire this year including:

• Power mobility devices (September 2012- August 2018)
• Repetitive scheduled non-emergency ambulance services (December 2014-November 2016)
• Nonemergency hyperbaric oxygen therapy (March 2015-February 2018)
• Home health services (August 2016-March 2017)

The GAO estimates that through March 2017 these programs reduced CMS’ spending by as much as $1.9 billion. The GAO cites some support from provider, supplier, and beneficiary stakeholders for continuing the programs such as reduction of unnecessary utilization.

However, the agency acknowledges that provider and supplier stakeholders often face challenges obtaining the required documentation from physicians. The GAO also notes that providers and suppliers struggle with apparently conflicting or unclear guidance from MACs regarding prior authorization for accessories deemed necessary for certain DMEPOS items. Technically, these accessories fall outside the DMEPOS prior authorization program; however, MACs review these accessories when making prior authorization determinations. This causes confusion and uncertainty for providers, suppliers, and beneficiaries, because they cannot turn to CMS’ guidelines to judge whether these accessories are provisionally approved and must wait for the MAC’s determination.

The GAO admits that this is contrary to one of the stated aims of the program, which in theory should eliminate questions about whether these items or services will be approved for payment.

The GAO recommends that CMS include essential accessories in the DMEPOS prior authorization program and in general that it continue the prior authorization programs.