Prior authorization is a process for provisional verification of coverage before the item or service is furnished to the beneficiary and before the claim is submitted for processing. The party requesting payment submits medical documentation to the medical review contractor for evaluation and a prior authorization determination. Knowing whether an item or service is determined to be medically necessary, prior to dispensing, is very helpful to the supplier.

The Medicare Administrative Contractor (MAC) performs the review at the direction of CMS (Centers for Medicare and Medicaid Services) or other authorizing party and will alert the party requesting payment of any potential issues with the information submitted. The prior authorization determination is either a provisional affirmative or a non-affirmative decision.

CMS announced in the Federal Register (published on December 21, 2016) the selection of two items of durable medical equipment subject to required prior authorization beginning on March 20, 2017:

• K0856: Power wheelchair, group 3 std., single power option, sling/solid seat/back, patient weight capacity up to and including 300 pounds
• K0861: Power wheelchair, group 3 std., multiple power option, sling/solid seat/back, patient weight capacity up to and including 300 pounds

As a condition of payment, suppliers or beneficiaries submitting claims in Illinois, Missouri, New York or West Virginia, must receive prior authorization before the item is furnished or a claim is submitted.

CMS also announced its intent to expand the prior authorization process for codes K0856 and K0861 nationwide in July 2017.

In addition, a master list of 135 HCPCS codes meeting inclusion criteria and potentially subject to prior authorization in the future has been established. CMS and the MACs will announce changes to the program when they occur.

Resource Links CMS Final Rule: Click here to view

Master List of HCPCS Code Subject to Frequent Unnecessary Utilization for Prior Authorization: Click here to view

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