Phase 2 of OnBoard Limited Release (OBLR) begins on Monday, April 4. As part of Phase 2, the Board will be introducing a new durable medical equipment (DME) fee schedule and introducing new requirements for submitting prior authorization requests (PARs) for DME.
Here are some things to keep in mind:
- The old DME reimbursement formula will no longer apply.
Previously, the Board had adopted the NYS Medicaid fee schedule, with some exceptions.
As of April 4, this will no longer be the case. Instead, the Board will be utilizing its own fee schedule that includes maximum rental and purchase prices as well as a “PAR REQUIRED” column to indicate those listed items that require prior authorization.
The Board recently adopted amendments to its DME fee schedule regulations that require the Board to update the fee schedule annually; however, the amendments also notes that newly added items will not have an associated fee.
This means that those newly added items will require prior authorization – and that providers will need to include a price in the PAR submission.
- OnBoard is replacing paper forms used to request prior authorization (at least for DME).
New York has several paper forms that have been used to request prior authorization for different services (MG-1, MG-2, C4-AUTH).
While these forms technically haven’t gone away yet (that won’t happen until Phase 3 of OBLR in May), they cannot be used to request prior authorization for anything that requires online submission of a PAR via OnBoard.
Once the new DME fee schedule goes into effect on April 4, providers will have to access OnBoard and submit a PAR for any DME item that is not listed on the fee schedule or that is listed as “PAR Required.”
- Doctors will need to have some idea of what the DME item costs, unless it’s priced in the fee schedule.
Requesting providers often don’t know how much an item costs; that’s usually an issue to be resolved between the medical supplier and the payer.
Under the new system, there will be a two-fold approach.
— If the fee schedule sets a price: the supplier cannot bill above fee schedule.
— If the fee schedule doesn’t set a price: the requesting provider is expected to provide one for the payer to approve.
In other words, if you’re a physician who is trying to get authorization for DME, *you* will be expected to provide a price unless one is already provided in the fee schedule.
- For some DME, payers will need to reduce price prospectively rather than retrospectively.
Under the new regulations, it’s fairly easy to waive an objection without meaning to do so.
The regulations prohibit objections to payment for treatment if the payer previously had an opportunity to raise that objection as part of a PAR denial or partial approval, but failed to do so.
DME PARs can present an interesting challenge here, because they are the only form of PAR in which the payer may be expected to raise objections to price. If the fee schedule doesn’t provide a price, there will be a price included in the PAR. It will then be the responsible of the payer (or rather, their reviewers) to either approve that price, or to offer an alternative.
The Board has also introduced a requirement that any reviewer wishing to approve a PAR at a lower price must list at least two vendors who can provide the item at the lower price, and those vendors must meet certain proximity/delivery requirements.
This introduces an element that reviewing physicians are not going to be familiar with. Reviewing physicians are trained to apply treatment guidelines – not to look for the cheapest DME vendors in a 5 mile radius.
This means that adjusters will likely want to ensure that the alternative pricing is on-hand before a PAR reaches level 2.
- Mistakes can lead to penalties.
The Board’s new DME prior authorization regulation (12 NYCRR 442.4) mentions penalties in six different places.
Under the new process, payers will have only four calendar days to review a request. During that time, they’ll have to evaluate compensability/relatedness issues, complete a medical review (and a second review, in the case of a denial or partial approval), and (where the PAR includes a requested price) compare the requested price to prices offered by other vendors that meet the proximity/delivery criteria.
Essentially, the payer will have four calendar days to evaluate and raise any objection to compensability, relatedness, medical necessity, or price.
Failure to respond in time could result in penalties (and approval of the PAR by Order of the Chair). Failing to raise an objection in the PAR response – and then trying to raise it later –could result in penalties. Failing to notify the injured worker of the PAR outcome could result in penalties.
In short, the new DME PAR process will require effective communication between adjusters, reviewers, and DME vendors/networks to ensure that requests are approved on time, at the right price, and without risk of penalty.