Part 2: Prior Authorizations – The Biggest Bottleneck in DME Billing

Prior authorizations (PAs) are one of the most frustrating barriers in durable medical equipment (DME) billing. While intended to control costs and ensure medical necessity, they often create delays for patients and administrative headaches for providers. For DME suppliers, understanding the prior authorization process is critical to avoiding denials and keeping claims moving.

Why Prior Authorization Exists

Payers use prior authorization to confirm that equipment meets medical necessity criteria before it is dispensed. This requirement is particularly common for high-cost braces, orthotics, and other DME that might otherwise be overutilized.

Source: American Medical Association – Prior Authorization Research

The Impact on DME Providers

Delays in Patient Care – Patients often wait days or weeks for approval, which can delay treatment and recovery.
Increased Administrative Burden – Staff must gather documentation, submit forms, and follow up repeatedly.
High Denial Risk – Missing or incomplete information almost always leads to denials.
Inconsistent Rules – Medicare, Medicaid, and commercial insurers all set different prior authorization requirements, making standardization nearly impossible.

Medicare and Prior Authorization

Medicare has expanded prior authorization programs for certain DME items considered “frequently subject to unnecessary utilization.” This includes power wheelchairs, back braces, and certain knee orthoses. Suppliers must submit documentation before dispensing equipment or risk nonpayment.

Source: CMS – Prior Authorization and Pre-Claim Review Initiatives

Common Prior Authorization Pitfalls

Incomplete Documentation – Missing diagnosis codes, clinical notes, or provider signatures.
Timing Issues – Submitting too late or dispensing before approval.
Confusion Over Codes – Submitting prior auth under the wrong HCPCS code, especially when multiple codes exist for similar equipment.
Resubmission Challenges – Some payers require starting over completely if the first request is denied.

Best Practices for Managing Prior Authorizations

Stay Current with Payer Policies – Maintain a reference guide of each payer’s rules and update it regularly.
Standardize Documentation Templates – Ensure providers capture the required details the first time.
Track Requests in Real Time – Use billing software or spreadsheets to monitor pending authorizations.
Educate Staff and Providers – Ongoing training reduces preventable errors.
Build in Buffer Time – Whenever possible, anticipate the PA process early to avoid last-minute delays.

Looking Ahead

Prior authorization reform is a hot topic, with ongoing pressure from healthcare organizations and advocacy groups to reduce administrative waste. While some payers are piloting faster electronic prior authorization processes, the current system remains one of the toughest hurdles in DME billing.

Until significant reform occurs, providers must focus on compliance, documentation, and consistent workflows to keep approvals moving.

👉 Next in the series: Part 3 – Documentation and Medical Necessity: Getting It Right the First Time

Part 2: Prior Authorizations – The Biggest Bottleneck in DME Billing