CMS revises payment classification for RADs

Sunday, January 29, 2006

BALTIMORE - In a move that the agency says will save beneficiaries and Medicare money, CMS last week reclassified respiratory assist devices (RADs) as capped rental DME items.

The devices will no longer be considered DME items that require frequent and substantial servicing, beginning April 1, 2006.

Per the new payment classification, beneficiaries will pay $96 per month in co-insurance to use the devices. After 13 months, beneficiaries have the option of taking ownership. If they do, they no longer have to pay co-insurance to rent the devices.

Currently, beneficiaries pay up to $128 per month for as long as they're using RADs.

With the new classification, CMS stated, Medicare saves money because the monthly rental payments will be reduced with the fourth month of rental and will stop altogether after 13 months, when title for the equipment transfers from the supplier to the beneficiary.

CMS revised the payment classification for RADs after the Health and Human Services Inspector General found that RADs do no require frequent service to justify continuous rental payments.

The agency will allow for a transition period: rental months paid prior to April 1, 2006, will not count toward the cap.