Glossary / Prepayment review
Prepayment review Medicare DME termPrepayment review
Medical review of a claim before it is paid: the MAC suspends the claim, issues an ADR, and decides based on the records you return.
Prepayment review is a claim determination a Medicare reviewer makes before payment. When a claim hits a prepayment edit, the MAC suspends it and sends an Additional Documentation Request for the supporting records. The decision that follows is an initial determination, which means it carries full appeal rights if the claim is denied. Postpayment review is the same process after the claim has been paid, and can end in an overpayment demand.
CMS's Program Integrity Manual gives providers and suppliers 45 calendar days to respond to a MAC's prepayment ADR. No response means the claim is denied without the documentation ever being reviewed. Edits can be automated (the claim system checks codes and frequencies) or complex (a clinical reviewer reads the record against the LCD).
For DME, prepayment review is the main enforcement path for items that are not on the Required Prior Authorization List, including CPAP, oxygen, respiratory assist devices, and hospital beds. That is the practical reason to build the file to the LCD before billing: there is no PA decision to catch the gap first. CMS can also place a supplier on 100 percent prepayment review, meaning every claim for a code, or every claim the supplier submits, is reviewed.
Common questions
What is the difference between prepayment review and prior authorization?
Timing. Prior authorization is a decision before delivery on items CMS lists; prepayment review is a decision after billing, on any claim the MAC selects. The documentation standard is the same.
How does a claim get picked for prepayment review?
Through MAC edits driven by data analysis, item-specific targeting, TPE, or a supplier-specific review.
Can I speed up a suspended claim?
Respond to the ADR completely and early through the MAC portal or esMD. Partial responses are processed as incomplete, so send everything requested at once.
Related
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Sources: CMS Program Integrity Manual, Chapter 3 (3.2 Overview of Prepayment and Postpayment Reviews) · Noridian JA DME: How to Respond to an ADR . Definitions summarize public Medicare policy and are not legal or billing advice.
More terms
- ADR — Additional Documentation Request
- Prior authorization
- Affirmation and non-affirmation
- UTN — Unique Tracking Number
- SWO — Standard Written Order
- Face-to-face encounter
- DME MAC — Durable Medical Equipment Medicare Administrative Contractor
- Jurisdiction
- PTAN — Provider Transaction Access Number
- NPI — National Provider Identifier
- MBI — Medicare Beneficiary Identifier
- LCD — Local Coverage Determination
- NCD — National Coverage Determination
- Policy article
- HCPCS — Healthcare Common Procedure Coding System
- Length of need
- Prior authorization exemption
- Competitive bidding
- CMN and DIF — Certificate of Medical Necessity and DME Information Form
- Proof of delivery
- TPE — Targeted Probe and Educate