MLN Matters Number: SE0916 Revised
Related Change Request (CR) #: N/A
Related CR Release Date: N/A
Effective Date: N/A
Related CR Transmittal #: N/A
Implementation Date: N/A
Note: This article was revised on August 28, 2009, to provide additional information regarding NCDs and LCDs.
Provider Types Affected
Physicians, providers, and suppliers submitting claims to Medicare contractors (carriers, Medicare Administrative Contractors (MACs), Fiscal Intermediaries (FIs), and/or Regional Home Health Intermediaries (RHHIs)) for services provided to Medicare beneficiaries.
Provider Action Needed
This article is based on the Social Security Act and other laws which describe covered and non-covered items and services and their payment under Part A and Part B. Originally, the Social Security Act did not authorize any form of ‘prior authorization’ for Medicare services. The law was subsequently changed to allow prior authorization of limited items of Durable Medical Equipment and physicians’ services. Currently, Medicare does not pre-authorize coverage of any item or service that will receive payment under Part A or B, except for custom wheelchairs. Please advise all staff and inform your Medicare patients, as appropriate, that Medicare does not currently pre-authorize coverage for any item or service other than custom wheelchairs.
Background
The overall scope of allowable benefits under the Medicare program is prescribed by law. When Medicare was established, Congress included certain provisions on the broad categories of items and services that may be covered under the Medicare program as well as provisions on certain items and services that were to be excluded from coverage. Congress also included in Section 1862(a)(1)(A) of the Social Security Act the following provision:
“Notwithstanding any other provision of this title, no payment may be made under part A or part B for any expenses incurred for items or services which…are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member,…”
This clause has become known as the ‘reasonable and necessary’ provision. Medicare coverage and payment for items and services is therefore contingent upon a determination that an item and service:
- Falls within a benefit category
- Is not specifically excluded from coverage and
- The item or service is ‘reasonable and necessary’ unless specifically excluded from meeting this provision
Also, as prescribed by law, the Centers for Medicare & Medicaid Services (CMS) develops National Coverage Determinations (NCDs), which are national policy statements granting, limiting, or excluding Medicare coverage for a particular item or service. NCDs may be found in the Medicare National Coverage Determinations Manual (Publication #100-03) at www.cms.hhs.gov/Manuals/IOM/list.asp on the CMS Web site.
For those items or services whose coverage is not determined in law, regulation or NCD, the local Medicare contractors are authorized to develop local coverage determinations (LCDs) to further determine coverage of items and services covered by Medicare. LCDs specify under what conditions an item or service is considered to be ‘reasonable and necessary.’ Contractors develop LCDs by considering medical literature, the advice of local medical societies and medical consultants, public comments, including comments from the provider community. LCDs may be found on the CMS coverage Web site and your local contractor’s Web site.
If a provider believes that a Medicare NCD or LCD needs to be revised, they should request CMS or its contractors to reconsider the existing NCD or LCD. What factors CMS considers when deciding to open or reopen an NCD can be found at www.cms.hhs.gov/mcd/ncpc_view_document.asp?id=6 on the CMS Web site. To request a new LCD or an LCD reconsideration, the provider should contact the local Medicare contractor.
In regard to prior authorization under fee-for-service Medicare, providers should be aware that section 1834(a)(15)(c) of the Social Security Act allows for an Advance Determination of Medicare Coverage (ADMC) for certain items of Durable Medical Equipment (DME). The only items of DME currently subject to this provision are custom wheelchairs. Also, Section 938 of the Medicare Prescription Drug Improvement and Modernization Act of 2003 (Public Law 108-173) required the Secretary to establish a ‘Prior Determination’ process for a limited number of physicians’ services under Medicare. Implementation of this provision is pending. It should also be noted that Medicare Part C & Part D programs are authorized to have and may require prior authorizations for services billed to them.
Additional Information
The Social Security Act Amendments of 1965, Section 1862 (a)(1)(A) can be viewed at www.ssa.gov/OP_Home/ssact/title18/1862.htm on the Social Security Web site.
If you have questions, please contact our Provider Contact Center at our toll-free number (866) 332-7025 (Ohio and West Virginia) or (888) 828-2092 (South Carolina Part B).
Disclaimer
This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement of their contents.