Medicare Adds Prior Authorization for Durable Medical Equipment

Medicare targets fraud, waste, and abuse

Medicare prior authorization
Medicare plans to add an approval process before you can get medical equipment.. Maskot / Maskot / Getty Images

The U.S. health system spent $46.4 billion on durable medical equipment (DME) in 2014. Unfortunately, not all of those funds were spent wisely. Medicare lost $5 billion dollars that same year on fraudulent or improper payments for DME. The Centers for Medicare and Medicaid (CMS) is now taking action to rein in those costs.

What Is Durable Medical Equipment?

Durable medical equipment (DME) is long-lasting reusable equipment aimed to treat a medical condition.

According to Medicare, DME should be expected to last at least three years and should be for use in the home.

Examples of DME include:

CMS plans to add a pre-approval process known as a prior authorization for more than 130 medical supplies starting on February 29, 2016.

Fraud, Waste, and Abuse

Medicare fraud is pervasive. In 2015, the Medicare Fraud Strike Force took down 243 healthcare professionals, including doctors, for approximately $712 million in alleged fraudulent billings. A significant portion of these claims was for DME such as power wheelchairs. Since 2007, the Strike Force has filed charges to recover $7 billion in losses.

The Affordable Care Act (Obamacare) has added funding to fight fraud but the time has come for CMS to also take action.

Orders for DME will now require a prior authorization, making it more labor intensive for your healthcare provider to order certain equipment in the first place. This extra step gives CMS an opportunity to review the case and decide whether the request for DME is valid.

How Prior Authorizations Work

Will prior authorizations delay access to what you need?

Prior authorizations require that your healthcare provider complete paperwork justifying the medical need for your DME. Once this paperwork is received, CMS or its contractors will give a decision within 10 business days. In urgent cases, a case may be expedited to a two-day review.

The new policy is expected to save Medicare as much as $580 million over 10 years. The hope is to decrease fraud, waste and abuse and to reduce DME use to only that which is medically necessary.

Note this policy will not apply to Medicare Advantage plans since they are managed by private insurance companies.


Becker's Hospital CFO. New CMS prior authorization rule could save Medicare $580M. Published December 30, 2015.

Centers for Medicare and Medicaid. National Health Expenditures 2014 Highlights. Accessed January 19, 2016.

Federal Register. Medicare Program; Prior Authorization Process for Certain Durable Medical Equipment, Prosthetics, Orthotics, and Supplies. Published December 30, 2015. Durable medical equipment (DME) coverage. Accessed January 21, 2016.

U.S. Department of Health and Human Services. National Medicare fraud takedown results in charges against 243 individuals for approximately $712 million in false billing. Published June 18, 2015.

Continue Reading