Provisional Prior Authorization from Medicaid- Three State Approach

Beneficiaries who are dually eligible for Medicare and Medicaid often experience difficulties accessing durable medical equipment (DME), such as wheelchairs, in a timely manner. Whether Medicare or Medicaid covers a specific item may be unclear. Medicaid usually is the “payer of last resort,” which means that DME suppliers generally must obtain a Medicare denial before Medicaid will pay.  For higher cost items, waiting for a Medicare denial can create an access problem, especially for lower-income beneficiaries.

To address this issue, some states, such as Illinois, California, and Connecticut, have developed procedures for provisional prior authorization from Medicaid for such items. States may supplement these procedures by posting lists of DME items that Medicare consistently denies as noncovered, and allow DME suppliers to bill Medicaid directly for these items without first billing Medicare. This can make it more likely that suppliers will provide DME to dually eligible beneficiaries in a timely way, with less confusion and uncertainty about who will pay and when.

DME in Managed Care

The Integrated Care Resource Center (ICRC) reviewed these issues and offered some potential solutions in an April 2014 technical assistance brief Improving Coordination of Home Health Services and Durable Medical Equipment for Medicare-Medicaid Enrollees in the Financial Alignment Initiative. This brief outlined the problems dually eligible beneficiaries sometimes face in accessing home health and DME items and services in the fee-for-service (FFS) system. It then described some solutions that are possible in the capitated managed care environment of the financial alignment demonstrations, where a single entity is responsible for the coordination and payment of these overlapping benefits.

DME in Fee-for-Service

In an FFS environment, states can take several approaches to facilitate access to DME for dually eligible beneficiaries. Several approaches were described by the federal Center for Medicaid and CHIP Services in a January 2017 Informational Bulletin Strategies to Support Dual Eligible Beneficiaries’ Access to Durable Medical Equipment, Prosthetics, Orthotics, and Supplies.2 Under one strategy, some state Medicaid agencies grant provisional prior approval to DME items. This still requires the supplier to obtain a Medicare denial or a non-affirmed Medicare prior authorization request as the case may be before submitting a claim for Medicaid payment. This would give a supplier some assurance that payment would be made by either Medicare or Medicaid at some point (assuming the item is medically necessary), which could facilitate more timely access for dually eligible beneficiaries.

Provisional Prior Authorization

ICRC searched for examples of states that have implemented provisional prior authorization (PA) policies, supported by lists of DME that Medicare generally does not cover. Fourteen states – Alaska, California, Connecticut, Georgia, Idaho, Illinois, Indiana, Kansas, Minnesota, Nevada, New York, Ohio, Oregon, and Utah – all appear to authorize suppliers to bill Medicaid directly for DME items that Medicare generally does not cover. In order to get a better understanding of how states implement this approach, ICRC interviewed Medicaid staff in California, Connecticut, and Illinois about their state’s specific billing policies and reviewed material available in relevant public documents and on each state’s web site.

Integrated Care Resource Center (ICRC)

The Integrated Care Resource Center is a national initiative of the Centers for Medicare & Medicaid Services Medicare-Medicaid Coordination Office to help states improve the quality and cost-effectiveness of care for dually eligible beneficiaries. The state technical assistance activities provided by the Integrated Care Resource Center are coordinated by Mathematica Policy Research and the Center for Health Care Strategies.