PMD demo start date: Sept. 1

WASHINGTON - The seven-state power mobility device demonstration project will begin nine months after its original start date.

The three-year demo will begin Sept. 1, according to a notice CMS filed in the Federal Register Aug. 1. The notice states that the primary reason for the demo is to reduce Medicare fraud.

"Power mobility devices have had historically high incidents of fraud and improper payments,” it states. “Although we recognize that many improper payments are not the result of willful fraud, this error rate represents over $822 million dollars in estimated improper payments."

Since it announced the demo last November, CMS has held Open Door Forums to release information about the program.

As previously announced, providers will have a three-month grace period to begin using the demo's prior authorization process. After that, non-competitive bidding contract providers will receive a 25% pay reduction and undergo prepay reviews for claims not sent through the prior authorization process.

Initially, the demo included a prepay review phase and a prior authorization phase, and started in each of the seven states at different times beginning Jan. 1.

After criticism from stakeholders and lawmakers, however, CMS revamped the demo to include only the prior authorization phase and to start the program in all seven states (Michigan, Illinois, New York, Florida, Texas and California) at the same time. Claims in those states accounted for 43% of total Medicare expenditures for PMDs in 2010.

The next Open Door Forum for the demo is scheduled for Aug. 29.

Read the notice here.

Find out more about the demo at go.cms.gov/PADemo.

For frequently asked questions about the demo, visit go.cms.gov/PAFAQ2012 keyword PMD.