please sir, may I have another?


please sir, may i have another 6.3.14On May 28, Medicare published a new rule that would require your prosthetist to submit virtually all prosthetic claims for prior authorization. What is that? Why is Medicare proposing this change in policy? What effect will it have on you? We discuss each of these questions in this week’s (longer-than-normal but important) post.

what is prior authorization?

Prior authorization requires you to seek approval from the payer before you can deliver the item. While common among private payers, which usually require prior authorization in order to confirm what exactly this plan out of the 40 offered by this insurer covers, traditional fee-for-service Medicare – a payment system with the exact same coverage for every beneficiary –  has never required it.

In 2014, FFS Medicare, which has always operated under a “deliver and bill” methodology, will provide coverage to 70% of all Medicare beneficiaries. In this system, your prosthetist obtains a prescription from your physician, fabricates your prosthesis and then delivers it to you. After delivery, she submits the claim to Medicare for payment.

why is Medicare proposing this change in policy?

Unlike prior authorization in the private pay world, Medicare’s proposed rule isn’t really about confirming what Medicare covers. Rather, the proposed rule is intended to establish whether the actual claim materials satisfy Medicare’s requirements. Medicare’s logic is simple: (a) its data suggests that its paying for lower limb prosthetic claims that lack required documentation, (b) the current “deliver and bill” FFS system doesn’t allow it to review claim documentation beforehand, preventing it from addressing these inappropriate payments, so (c) “We believe a prior authorization process would ensure beneficiaries receive medically necessary care while minimizing the risk of improper payments and therefore protecting [sic] the Medicare Trust Fund.” While this appears to make sense at first glance, a deeper look at the issue indicates the data on which Medicare bases this proposal aren’t as clear-cut as it maintains.

Just to cite one example out of may possibilities, Medicare contends that 66% of all DMEPOS claims (more on that acronym in the next sentence) failed to meet its coverage requirements. The 66% figure applies to all DMEPOS – durable medical equipment, prosthetics, orthotics and supplies. DME and supplies are things like crutches, canes, wheelchairs, mattresses, and diabetic test strips – devices delivered to Medicare beneficiaries in much larger numbers than prostheses. Because the annual report relied upon by Medicare for this statistic contains no data breaking down prosthetic-specific error rates, it’s hard to know whether improper payments for prosthetics were anywhere near as high as those for DME and supplies.

It’s unlikely that potential data deficiencies like this will derail the push for prior authorization. But when Medicare proposes changes that could have a significant impact on amputees, you would hope that the foundation upon which the proposed rule is built would be rock solid. It’s not entirely clear that that’s the case here.

what effect will it have on you?

From the amputee perspective, it’s hard to find something positive in the proposed rule. The best way to illustrate this is with a hypothetical patient.

Jane is a new amputee who lost her right leg below the knee at age 65 to dysvascular disease. It has been 45 days since her amputation and she has been limited to a wheelchair since the surgery. Her prosthetist has already assembled the necessary paperwork to file her claim and determined that she is ready for delivery of her first prosthesis. Under the current system, the prosthetist obtains a prescription from the physician, documents Jane’s medical need for a below-knee prosthesis, orders the appropriate components, and delivers it to her as soon as he can schedule her for fitting. He then bills Medicare.

Current State Outcome: Jane has her prosthesis on Day 45 and the prosthetist is responsible for ensuring that Medicare pays him.

Now assume exactly the same clinical facts but with Medicare’s proposed prior authorization rule in place. On day 45 Jane’s prosthetist has all the necessary paperwork but isn’t delivering anything. Instead, he’s submitting that paperwork to Medicare for review. Let’s further assume that everything goes perfectly – they get prior approval on Day 55 and Jane receives her prosthesis 5 days later when her prosthetist can first fit her in his schedule. Jane’s absolute best-case scenario is that she sits in a wheelchair until 60 days after her amputation instead of 45.

Whether there’s a material long-term clinical impact on Jane due to an extra 15 days in a wheelchair isn’t exactly clear. We’d probably all agree it would be better for Jane to be in her prosthesis on Day 45 as opposed to Day 60. But under this system, that isn’t possible.

Best-Case Prior Authorization Scenario Outcome: Jane has her prosthesis on Day 60.

Now let’s walk through a more pessimistic – and, based on how Medicare’s contractors have reviewed prosthetic claims over the last 24 months – realistic fact pattern. Jane’s prosthetist submits the prior authorization request on Day 45. On Day 55, he receives notice from Medicare that it has denied his request for prior authorization, saying (a) without a great deal of specificity, the physician’s notes fail to satisfy Medicare’s coverage criteria and (b) he has failed to demonstrate the medical necessity of the prosthetic components prescribed for Jane.

The prosthetist contacts the doctor and gets what he believes to be additional appropriate documentation. He also updates his notes to further justify the components recommended and prescribed for Jane. He submits those for prior authorization on Day 60. Medicare responds on Day 80, informing him that it is still denying authorization because (a) the doctor’s notes don’t specifically state that Jane is “motivated to ambulate” and (b) Jane doesn’t have the functional “potential” to effectively use the components.

The prosthetist resubmits the authorization request a second time, now including a new physician note with the “motivation to ambulate” language included, new physical therapy notes addressing Jane’s functional potential and his own new records. It takes him a bit of time to assemble all this new information, as Jane needs to see the physician and PT, so he sends in the new paperwork on Day 95. On Day 115, Medicare finally approves the claim, and Jane receives her prosthesis on Day 120.

Here, it’s pretty clear that spending an extra 2 months in a wheelchair while Medicare screens paperwork will have both short-term and potential long-term effects on Jane’s rehabilitation. She now hasn’t been upright in 4 full months. She may well have developed a contracture in her knee joint. Her cardiovascular capability has degraded severely. Her sound leg’s muscle tone has also decreased. The chances of Jane becoming the kind of walker that her prosthetist originally envisioned are substantially lower. If she does get back to that level, it’ll take a lot longer. If she doesn’t, we can expect a greater number of physical and mental health issues to affect her in the coming months and years than she would have had otherwise.

Real Word Prior Authorization Scenario Outcome: Jane has her prosthesis on Day 120.

One other point on prior authorization: the system takes the authority for deciding what components are best suited for each individual patient out of the hands of the amputee’s health care team and gives it to claims processors. While Medicare officials might dispute this contention, compared to the current system it’s not even an arguable point.

Today, only the prosthetist and physician decide and document a course of treatment and a specific kind of prosthesis for each patient. The patient receives that prosthesis and the prosthetist must justify what she already delivered. But in a prior authorization world, if claims handlers don’t believe that the items prescribed for the patient are appropriate, they can effectively prevent the patient from receiving them in a timely fashion or, in a worst case scenario, at all. Prosthetists, faced with potentially lengthy delays and a patient who needs prosthetic care more and more with each passing day, may be forced to choose the path of least resistance. They may start putting Medicare patients in less appropriate components to get the prior approval, to provide the patient something.

Whatever the flaws of the current “deliver and bill” model, it has two strengths that prior authorization cannot replicate: (1) the health care team – the group with the best insight into the amputee’s clinical needs – has more control over what the patient gets, and (2) it allows amputees to receive more timely care.


For all the horror stories about (a) national government programs generally and (b) health care specifically, I’ve always taken a  positive view of how fee-for-service Medicare treats people with limb loss. I’ve stated multiple times over the last decade that if I could choose any insurance for my prosthetic needs, Medicare would be close to the top of my list.

Unfortunately, I’m hard-pressed to see how this proposed rule helps amputees, and that’s because it’s really not about helping amputees: as Medicare freely acknowledges, it’s about preventing improper payments. Medicare may accomplish that goal, but there’s really no way to do it in a prior authorization system without putting amputees in a worse position than they are today.

Medicare is taking public comments on the proposed rule between now and July 28, 2014.

If you wish to submit comments so that amputees’ voices are heard in this debate, you can click here to submit electronically. When you get to the webpage, cut and paste the following reference into the large “Search” box in the center of the page: “CMS-2014-0070-0001”. This will lead you to a citation of the proposed rule. To comment, just click on the “Comment Now!” blue button to the right side of the citation.  Alternatively, written/typed comments can be submitted by regular mail to Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS–6050–P, P.O. Box 8013, Baltimore, MD 21244–8013. 

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