CMS will implement its 3-year Power Mobility Devices (PMD) demonstration on September 1, 2012. Under this demonstration, CMS will implement a prior authorization process for PMDs for Medicare beneficiaries in CA, FL, IL, MI, NY, NC, and TX (states that CMS characterizes as having high populations of fraud- and error-prone providers). If a claim is submitted without a prior authorization decision, it will be stopped for review and the claim will automatically be assessed a 25% reduction of the Medicare payment after co-insurance and deductible (unless the supplier is a competitive bidding contract supplier). Note that CMS is providing a 3-month grace period before the payment reduction rule applies; the payment reduction begins for orders written on or after December 1, 2012. The demonstration covers the following PMD items: Group 1 Power Operated Vehicles (K0800 through K0802 and K0812); all standard power wheelchairs (K0813 through K0829); all Group 2 complex rehabilitative power wheelchairs (K0835 through K0843); all Group 3 complex rehabilitative power wheelchairs without power options (K0848 through K0855); pediatric power wheelchairs (K0890 and K0891); and miscellaneous power wheelchairs (K0898).