Cap rental debate divides HMEs

Sunday, April 30, 2006

WASHINGTON - HME providers stand unified in their opposition to the new 36-month cap on Medicare oxygen reimbursement, but when it comes to eliminating the cap rental option for DME, disagreement reigns.
Even before the Deficit Reduction Act eliminated the cap rental option, many providers encouraged patients to choose Medicare's purchase option rather than continue to rent the equipment beyond 13 months.
"We don't want to be tied to that equipment indefinitely," said Phil Carter, HME manager for Wilcox Pharmacy in Ludlow, Vt. "If we are taking those Medicare dollars for maintenance, then we maintain it. If we can't repair it, we buy a new one at our expense. And at some point, medical equipment can't be repaired."
President Bush signed the DRA in early February. The law capped oxygen reimbursement at 36 months. It also eliminated the cap-rental option for DME. Ownership of cap-rental DME now automatically transfers to the beneficiary after 13 months. Previously, patients had the option of renting equipment permanently or buying it outright after 13 months.
Conventional wisdom indicates that most providers would drop their jaws at losing not only title to the equipment but also the ongoing maintenance and service payments that accompany rental equipment.
Not so.
For many providers, like Carter, the hassle of renting and retrieving equipment, cleaning and repairing it, re-renting it and sometimes replacing and even having it disappear, outweighs the rental income. Some providers even believe that once Medicare has paid for a piece of DME, the patient should own it.
"It just makes sense," said Rick Perrotta, president of Network Medical Supply in Charlotte, N.C. "If Medicare or anyone else has paid you for the merchandise, why should it belong to you."
Added Jim Greatorex, president of Black Bear Medical in Portland, Maine: "I think it is better for the consumer to own the equipment. They have flexibility. They may not like us and can go someplace else."
Other providers feel differently.
CMS officials believe that by eliminating the maintenance and service payments they'll save millions. But by eliminating the rental option, lawmakers took from patients the ability to choose what option best fits their situation, said Tom Inman, president of Virginia Home Medical in Newport News, Va.
Safety is another issue, he said. Once title passes to the patient, he'll be responsible for maintenance, and many patients aren't capable or qualified for that.
"If a wheelchair has a wobbly wheel and the wheel falls off and the patient breaks a hip, Medicare loses," Inman said. "The safety issue has real potential impact on the program, but nobody on the Hill wants to hear that."
For that very reason, many managed care companies prefer to pay for maintenance than to transfer equipment ownership to the beneficiary,
said AAHomecare Chairman Tom Ryan.
"It is counterintuitive that CMS would go in the opposite direction," Ryan said.
In 2006, AAHomecare will work to repeal the cap on oxygen and the 13-month cap on DME, Ryan said.