Exemption from Prior Authorization: New Guidance

What You Need to Know

The DME MACs have issued additional guidance clarifying how the prior authorization exemption for certain DMEPOS suppliers will operate, including how eligibility is determined, how exemptions are monitored, and how suppliers will be notified of changes in status:

• Eligibility Review: The DME Medicare Administrative Contractors (DME MACs) will review each supplier’s prior authorization approval rates for items that require prior authorization.
• 90% Threshold: Suppliers with an approval rate of 90% or higher will be given the option on an annual basis to opt out from submitting prior authorization requests for devices currently subject to prior authorization. The exemption is optional. Even if a supplier qualifies, it can elect to continue submitting prior authorization requests.
• Post-Payment Monitoring: For suppliers that claim the exemption, the DME MACs will conduct an annual post-payment medical review sample. If the supplier maintains a 90% or greater approval rate it retains the exemption. Suppliers that fail to meet the 90% threshold during post-payment review will be required to resume submitting prior authorization requests as a condition of payment.
• Advance Notice: The DME MACs will notify suppliers at least 60 days before the effective date when an exemption is either granted or withdrawn.

What This Means for You

If you qualify for exemption from Medicare's prior authorization requirements, you will need to assess whether you want to claim the exemption or not. Relevant factors guiding that decision could include your organization's current satisfaction level with prior authorization, the degree to which prior authorization affects your operational efficiency, and your company's risk tolerance for a "deliver and bill" model compared to prior authorization. 

Once you opt in or out, you will have to wait until the next annual assessment to switch status. So we recommend thoughtful discussion among your company's leadership team to assess the pros and cons of opting in if you are eligible.

Finally, the 60-day advance notice requirement does give you time to perform a complete assessment of whether you wish to opt in or out, or alternatively, to plan for the reversion back to prior authorization if you opted in but then later fell below the 90% threshold in your annual claims review sample. 

We will continue to provide you updates about the new exemption from Medicare prior authorization as more information becomes available.