CMS re-commits to gap filling

Stakeholders worry about having flawed methodology ‘set in stone’
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Friday, October 4, 2019

WASHINGTON – Industry stakeholders agree that fee schedule amounts for new technology are an issue that needs to be addressed, but when CMS publishes its final rule in the next few weeks, they say the best-case scenario might be the status quo.

CMS published a proposed rule in July detailing a framework for establishing fee schedule amounts for new HCPCS codes, but it still relies on a gap-fill methodology that stakeholders say—and even CMS itself has said in the past—is flawed.

“I think the best-case scenario is for them to set this aside and not to move forward with their recommendations,” said Kim Brummett, vice president of regulatory affairs for AAHomecare. “(In the short term), I think they need to leave it like it is, which they can do.”

The proposed rule details how CMS will identify comparable items; what fee schedule amounts it will use for gap-filling purposes; what technology assessment it will use when there are no amounts available for gap filling; and how it will adjust amounts for items that use supplier/commercial prices.

One of the biggest concerns stakeholders have with the proposed rule is that it “sets in stone” gap-filling—a methodology that essentially deflates current year pricing to 1987 and then re-inflates it to present day, resulting in fee schedule amounts that are too low, they say.

“Before it was just in the Medicare Claims Processing Manual,” Brummett said. “If it’s regulation, it stays forever.”

Aside from the industry’s long-standing concerns with gap filling, stakeholders take issue with the newly introduced “technology assessment” for being too vague. As part of the assessment, CMS, possibly with the help of an outside party, will review the supplier cost of furnishing the new items and compare the cost of furnishing the older items, and will determine the relative difference. From there, it will establish a pricing percentage and will multiply that percentage to the existing item to calculate the new item’s fee schedule.

“They have criteria that all seem to be assessing the cost of manufacturing,” said Cara Bachenheimer, head of government affairs for Brown & Fortunato. “There’s nothing in there about the service-related costs or the complexity of providing these products to patients. The manufacturing cost is not the total delivered cost of serving beneficiaries, meeting compliance, etc.”

If Bachenheimer had her way, CMS would initiate negotiated rulemaking, a formal process that would allow “meaningful input” on gap-filling and possible alternatives through public meetings and other measures, she says.

“That would go a long way to address the transparency issue,” she said.

To implement the final rule by Jan. 1, 2019, as planned, CMS must publish the final rule by Nov. 1, stakeholders say.