Begining in January of 2012, a CMS demonstration program will start requiring prior authorization for certain medical equipment before Medicare beneficiaries can recieve the equipment. CMS is initiating a three-year demonstration program as a program integrity initiative in states that CMS believes have higher instances of fraud and error-prone providers. The initial seven states are – CA, FL, IL, MI, NY, NC and TX
The demonstration will be implemented in two phases. During the first phase (the first three to nine months), the Medicare Administrative Contractors will conduct prepayment reviews on certain medical equipment claims. The second phase, for the remainder of the three-year demonstration, will implement prior authorization, as a mechanism to prevent improper payments and deter the fraudulent provision of items or services.
A CMS Fact Sheet on this demonstration and other program integrity intiatives can be found here —-> CMS Fact Sheet