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CMS Suspends Prior Authorization for Certain DMEPOS and Skilled Nursing Home Update

August 25, 2022

For more information about this blog post, please contact  Ryan L. O’Neill or Labinot Alexander Berlajolli.

CMS Issues Final Rule for the Suspension of Prior Authorization Requirements for Specified Orthoses Prescribed and Furnished Urgently or Under Special Circumstances

On August 10, 2022 the Centers for Medicare & Medicaid Services (“CMS”) issued a final rule (87 FR 48609) which was effective, retroactively, April 13, 2022. This rule further modifies the December 30, 2015 final rule, (80 FR 81674) titled, “Medicare Program; Prior Authorization Process for Certain Durable Medical Equipment, Prosthetics, Orthotics, and Supplies,” (“DMEPOS”) which established an initial Master List (called the Master List of Items Frequently Subject to Unnecessary Utilization) of certain DMEPOS that the federal government determined were frequently subject to unnecessary utilization and additionally established a prior authorization process for these items.

The final rule serves to announce the suspension of prior authorization for specified orthoses items on the Required Prior Authorization List that require prior authorization as a condition of payment under certain circumstances when reported with certain modifiers. Specifically, CMS is suspending prior authorization requirements indefinitely, under these limited circumstances:

  • Claims for healthcare Common Procedure Coding System (“HCPCS”) codes L0648, L0650, L1832, L1833, and L1851 that are billed using modifier ST, indicating that the item was furnished urgently.
  • Claims for HCPCS codes L0648, L0650, L1833, and L1851 billed with modifiers KV, J5, or J4, by suppliers furnishing these items under a competitive bidding program exception (as described in 42 CFR 414.404(b)), to convey that the DMEPOS item is needed immediately either because it is being furnished by a physician or treating practitioner during an office visit where the physician or treating practitioner determines that the brace is needed immediately due to medical necessity or because it is being furnished by an occupational therapist or physical therapist who determines that the brace needs to be furnished as part of a therapy session(s).

Prior authorization will continue for these orthoses items (HCPCS L0648, L0650, L1832, L1833, and L1851) when furnished under circumstances not covered in this final rule, as well as all other items on the Required Prior Authorization List, available here.

CMS Issues Fiscal Year 2023 Skilled Nursing Facility Prospective Payment System Final Rule

On August 3, 2022, CMS issued a final rule that updates Medicare payment policies and rates for skilled nursing facilities under the Skilled Nursing Facility Prospective Payment System ("SNF PPS") for fiscal year ("FY") 2023 which includes updates for the SNF Quality Reporting Program ("QRP") and the SNF Value-Based Purchasing ("VBP") Program for FY 2023 and future years. Among other things, the final rule reflects the following updates:

  • A 5.1% payment rate increase stemming from a 3.9% market basket increase, a 1.5 percentage point market basket forecast error adjustment, and a 0.3 percentage point reduction for productivity.
  • Recalibration of the Patient-Driven Payment Model ("PDPM") parity adjustment factor of 4.6% with a two-year phase-in period that would reduce SNF spending by 2.3%, or approximately $780 million, in FY 2023 and 2.3% in FY 2024.
  • Finalizing a permanent 5% cap on annual wage index decreases to smooth year-to-year changes in providers’ wage index payments.

Additionally, the final rule included a new quality measure for the FY 2024 SNF Quality Reporting Program ("QRP") that tracks influenza vaccination coverage among healthcare professionals in SNFs. CMS has issued a Fact Sheet summarizing the final rule.

New Jersey Legislature Approves Bill S2422 Aa (1R)

The New Jersey legislature approved a new bill updating the New Jersey Life and Health Insurance Guaranty Association Act on August 12, 2022. The bill expands the assessment base that is to cover the insolvencies of long-term care insurers and requires that all life and health insurers assist in covering these insolvencies. Additionally, this bill sets the cap at $500,000 on health insurance benefits issued by the guaranty association in cases of insurer impairment or insolvency and is proposed for adjustment based upon changes in the healthcare costs component of the consumer price index from January 1, 2022, to the date on which the member insurer, as defined in the bill, becomes an insolvent insurer.

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