A CliffsNotes guide to 2006: DMEs have plenty to deal with

Wednesday, November 30, 2005

December brings a certain amount of reflection on the year's events and also calls for planning as we move into the New Year. Some years there is a lot to reflect on. This is one of those years. DMEPOS providers are at the center of the Medicare Modernization Act's implementation. Because the story is still unfolding, planning for next year will not be easy. Here is a score card to use as a guide.
National Competitive Bidding
The official NCB time line is dictated by statute. CMS is to begin competitive bidding in 10 of the largest MSAs starting in 2007. That seems clear enough. The unofficial time line, however, is not clear cut. Before CMS can rollout NCB, it has to publish a notice of proposed rulemaking (NPRM), specifying how it plans to implement NCB and solicit public comments. The NPRM could identify the products and MSAs that CMS will subject to competitive bidding, but more likely, it will identify only the criteria CMS will use to make those selections. Earlier this year, CMS predicted that it would publish the NPRM in June. At press time, it had yet to be published.
Accreditation, Quality Standards
The MMA also requires CMS to develop quality standards for DMEPOS providers that will be administered by accrediting bodies selected by CMS. Providers selected as winning bidders must meet the quality standards. This is important because it provides a level playing field for everyone submitting a bid. All competitors are bound by the same standards and must deliver the same level of quality and service--so far, so good. The law, however, states that CMS cannot delay NCB if there is a delay implementing the quality standards.
Many in the DMEPOS community have voiced their concern that NCB could go forward without having quality standards in place. At the end of September, CMS published draft standards. CMS opened the draft for comments through Nov. 28, 2005. Even after the standards are final, important questions about timing remain. CMS must identify the accrediting bodies that will implement the standards. Other questions that remain unanswered include whether providers who are accredited now will be "grandfathered" under the new standards and for how long; and how CMS plans to prioritize accreditation in the MSAs selected for bidding.
Inhalation Drugs
Last month, CMS announced a very substantial reduction to the dispensing fee for inhalation drugs. Despite industry studies showing that providers furnish a wide array of services to beneficiaries using these drugs, CMS concluded that a $33 dispensing fee for a 30-day supply and $66 for a 90-day supply of drugs was appropriate for established patients. The dispensing fee for new patients will remain at $57 for a 30-day supply. According to CMS, services that homecare pharmacies provide should not be included in the dispensing fee because they are not explicitly covered by Medicare. CMS proposed a demonstration to measure outcomes for beneficiaries receiving the monitoring that homecare pharmacies provide now, but the details for this demonstration are not available.
Elimination of Capped Rental
In October, the Senate Finance Committee put forth a proposal to eliminate capped rental reimbursement for DME. Under the proposal, title to medical equipment would transfer after 13 months and the service and maintenance reimbursement would be eliminated. The first month purchase option for power wheelchairs would also have been eliminated, forcing providers to rent the wheelchair for 13 months. As of press time, a modified provision survived in the Senate bill. Under the modification, power wheelchairs will continue to have a first month purchase option. The capped rental category for other medical equipment would be eliminated. Because most DME falls in the capped rental category, eliminating capped rental would have a widespread impact. It is not clear whether this proposal will survive in Congress. If it does, the provision is effective for new rentals beginning Jan. 1, 2006. If it does not, this proposal is likely to remain on Congress' agenda for next year.
Power Mobility Interim Final Rule
In August, CMS published an IFR that eliminated the CMN for wheelchairs and substituted extensive documentation from the medical records. The rule also requires a "face-to-face" evaluation of the beneficiary that must take place within 30 days of the order for the power wheelchair. The supplier must also have a written order prior to delivery of the wheelchair. The rule went into effect Oct. 25, 2005, although CMS accepted comments through Nov. 25, 2005. Language in the Senate appropriations bill would require CMS to withdraw the IFR and issue an NPRM in its place. A final rule would follow early next year. The delay comes with a price tag--a 1.5% reduction reimbursement for power wheelchairs in 2006.
Mobility LCD and New Codes
The suite of changes on mobility included a DMERC local coverage determination in September that surprised everyone with new power wheelchair codes. In order to qualify their products under the new codes, manufacturers would have been required to subject their products to extensive testing on a much abbreviated time frame. In response to concerns raised by manufacturers, CMS announced a delay in the implementation of the codes. CMS is assembling a panel of industry experts to advise it in the code development process. No deadline has be en set for implementing new codes. In the meantime, the LCD will remain in abeyance.
DMERC Transition, Appeals
In 2006, the DMERCs will transition to Medicare Administrative Contractors or MACs. MACs will no longer have medical directors. That function transfers to program safety contractors. Also, effective Jan. 1, 2005, the new appeals process kicks in for DMEPOS providers. The process consolidates Part A and Part B appeals, eliminates the in-person fair hearing for Part B, and generally is more formal than the current process.

Healthcare attorney Asela Cuervo is the principal in the Law office of Asela M. Cuervo. She can be reached at 202 496-1281.