Medicare announced in February that it would start a pilot project that would require pre-treatment approvals before patients can access certain types of care at select outpatient surgical centers that the Centers for Medicare and Medicaid Services has identified as high billers.

The project aims to ferret out efforts by ambulatory surgery centers — basically independent, stand-alone facilities — to seek reimbursement for cosmetic procedures they report as medically necessary. The new prior authorization requirement applies to 40 services related to five procedures:

• Rhinoplasties,
• Eyelid lifts,
• Botox injections,
• Varicose vein treatments and
• Panniculectomies (the removal of excess tummy skin after significant weight loss).

Medicare covers all of the above procedures if they are deemed medically necessary, but not if it’s for cosmetic purposes. Any facility that bills for cosmetic purposes is committing fraud, according to Medicare.

Medicare said it is running the pilot project in an attempt to root out fraud and waste in the system and ensure that it doesn’t pay for procedures that are not medically necessary.

The background

Since 2020, Medicare has been requiring prior authorizations as a condition for payment for these services when they are performed in hospital outpatient departments. It says the rule has borne fruit.

Spending for the selected services in the outpatient surgery setting was over $79.7 million a year before implementing prior authorization, and then dropped by 28% to around $57.3 million annually. Medicare expects similar results if prior authorization rules are implemented for the select services in the OPD setting.

But since it added that requirement, Medicare has seen a sharp increase in these services being provided at surgery centers that are independently owned and not attached to any hospitals, meaning the procedures do not require prior authorization.

This has raised concerns that these independent facilities may be billing inappropriately for these procedures.

What’s next

The new rules will first be rolled out for a five-year trial run in three states which have the most ambulatory surgical centers: California, Florida and Texas.

If the pilot project shows success after five years, the CMS would likely roll it out nationwide.

If you are going in for any of the procedures this rule covers, understand that Medicare won’t cover them unless it is medically necessary.

Article Source: https://www.insurancenewsletters.com/