For DME suppliers tired of submitting prior authorization requests on every qualifying item, CMS does offer a way out — an exemption process that removes the prior-authorization step for suppliers who’ve demonstrated a strong track record of compliant billing. It isn’t automatic, it isn’t permanent, and it’s evaluated at a specific supplier level rather than by individual HCPCS code. Here’s exactly how the exemption process works and what it takes to qualify and keep it.
What the exemption actually does
Under CMS’s DMEPOS prior authorization program, suppliers who consistently submit accurate, compliant prior authorization requests can earn an exemption from having to submit PA requests for items on the Required Prior Authorization List going forward. Instead of prior authorization, exempted claims go through post-payment review on a sample basis — meaning the supplier still bills and gets paid without the upfront PA step, but CMS retains the ability to audit a sample of those claims after the fact to confirm the exemption is still warranted.
How eligibility is measured
Qualification is based on a supplier’s affirmation rate — the percentage of initial prior authorization requests that get approved (affirmed) by the Medicare contractor without needing resubmission or additional documentation. To qualify for an exemption, a supplier generally needs to demonstrate:
- An affirmation rate of at least 90% on initial prior authorization requests during the evaluation period.
- A minimum volume of 10 initial PA requests submitted during that evaluation period — suppliers with too few PA submissions to establish a meaningful rate aren’t eligible for exemption consideration, regardless of how clean those few submissions were.
The evaluation is done at the level of the supplier’s PTAN (Provider Transaction Access Number) combined with the specific MAC jurisdiction — so a multi-location supplier billing through more than one jurisdiction is evaluated separately in each jurisdiction, and a strong affirmation rate in one jurisdiction doesn’t automatically carry over to another.
Evaluation periods run on an annual cycle. After an initial transition window, the standard annual cycle runs June 1 through May 31, with the resulting exemption typically taking effect for the following cycle — so performance in one June-through-May period determines exemption status for the next one.
What happens once you’re exempted
An exempted supplier no longer has to submit prior authorization requests for Required PA List items during the exemption period — claims can be submitted directly for payment. However, exemption is not a free pass from documentation obligations. CMS reviews a post-payment sample (commonly cited as a 10-claim sample with dates of service falling within the exemption period) to confirm the supplier is still meeting Medicare coverage, coding, and documentation requirements even without the prior-authorization checkpoint.
If that post-payment sample review shows the supplier has fallen below the required compliance threshold, or if the supplier’s PA-equivalent submission volume drops too low to be measurable, CMS can revoke the exemption — and reserves broad discretion to revoke an exemption at any time it identifies a compliance concern, not just at the annual renewal point.
What to actually do if you want to earn — or keep — an exemption
- Track your affirmation rate yourself, in real time, rather than waiting for CMS to tell you where you stand. Every prior authorization request your practice submits should be logged with its outcome (affirmed, non-affirmed, needs more information) so you always know your running rate well before the annual cycle closes.
- Treat “needs more information” responses as a coaching opportunity, not just a resubmission task. A pattern of incomplete initial submissions — missing a specific measurement, a required physician attestation, or a piece of clinical documentation — is usually fixable at the intake stage, and fixing it raises your affirmation rate on the first try rather than the second.
- Make sure your PA submission volume clears the 10-request minimum for each PTAN/jurisdiction combination you bill under. A supplier with a perfect but tiny sample size won’t qualify — if your volume is naturally low, this exemption may not be a realistic near-term target, and that’s worth knowing rather than assuming you’re on track.
- Don’t relax documentation standards after you’re exempted. Because CMS still audits a post-payment sample, the exemption changes when documentation gets reviewed, not whether it needs to support medical necessity and coverage criteria. Keep your intake and clinical documentation process exactly as rigorous as it was when you were submitting PA requests.
- Watch your MAC’s provider bulletins for the annual list of exempted suppliers and for any procedural updates to the evaluation methodology — Noridian and CGS both publish exemption process guidance and periodic updates on their DME MAC jurisdiction sites.
Suppliers who’ve successfully earned and kept an exemption tend to describe the same shift in mindset: they stopped thinking of the 90% affirmation threshold as the goal and started treating 100% clean initial submissions as the actual target, with the exemption as a byproduct. Chasing the exemption directly tends to produce just-good-enough documentation; chasing genuinely complete, well-supported initial submissions tends to produce the exemption almost automatically.
Common reasons suppliers lose an exemption they’ve already earned
Losing an exemption after earning it is usually not the result of a single dramatic compliance failure — it’s a slow drift. A supplier that expands into a new product category may not realize its documentation habits for that category aren’t as tight as the ones that earned the original exemption. A change in front-office staff can quietly erode the intake checklist that used to catch missing physician attestations before a claim went out. And a supplier whose overall Medicare billing volume declines can unintentionally drop below the 10-request minimum needed to even be evaluated, effectively losing the exemption by default rather than by an actual compliance problem. Building a recurring internal audit — reviewing a small sample of claims each quarter against the same criteria CMS’s post-payment review would apply — tends to catch this kind of drift long before an annual cycle closes.
Takeaway
The DMEPOS exemption is earned through a 90%-or-better affirmation rate on at least 10 initial prior authorization requests per PTAN/jurisdiction over a June-through-May cycle, and it comes with ongoing post-payment sample review, not a permanent pass. Track your own affirmation rate continuously and fix recurring documentation gaps at intake, and the exemption becomes a natural result rather than a separate project.