Code red: CMS slashes pricing

Tuesday, October 31, 2006

WASHINGTON - The rehab industry predicts that CMS's new plan to slash pricing for power mobility devices by up to 40% will force providers to shut their doors in droves, and, equally if not more disturbing, push beneficiaries into inappropriate equipment.
"It's not possible to underestimate the impact of this, even with all the struggles we've had to face this year," said Tim Pederson, vice chairman of AAHomecare's rehab council and CEO of WestMed Rehab in Rapid City, S.D.
CMS released its new prices for power wheelchairs and scooters Oct. 2. Within days, the industry had mounted a campaign to stop the agency's plans to implement the pricing Nov. 15. CMS also intends to implement new codes and coverage criteria on that day.
The industry suspected that CMS would slash pricing, especially for lower-end PMDs. But it was blown away by the magnitude of the "devastating" cuts: Under the new pricing, Medicare would reduce pricing for a certain standard power wheelchair from $5,500 to $3,900, said Eric Sokol, director of the Power Mobility Coalition, an association of rehab manufacturers and providers.
What surprised the industry even more, however, was that high-end wheelchairs--those used by beneficiaries with the most severe physical disabilities--received the biggest cuts. Under the new pricing, Medicare would reduce pricing for a certain high-end wheelchair would from $6,500 to $3,800, said industry sources
"Every high-end rehab provider that we've talked to has said that they could not provide equipment at these rates," said Cara Bachenheimer, vice president of government relations for Invacare. "You're talking about the providers with the least to cut and the wheelchairs for the most vulnerable."
Providers in rural areas would also have a hard time keeping their doors open, industry sources said. Pederson, who's the only Medicare provider for wheelchairs in a 300-mile radius of Rapid City, said at the very least, he'd have to be "very selective" of the PMDs he provides.
"It comes down to an access issue," said Sharon Hildebrandt, NCART's executive director. "This time it's a true access issue."
In addition to the cuts, the pricing contains anomalies that have providers and manufacturers scratching their heads. A Group 2 single power option wheelchair, for example, has a higher reimbursement rate than the more complex Group 3 single power option wheelchair.
The industry blames CMS's gap-filling methodology for what Seth Johnson, vice president of government affairs for Pride Mobility, called "largely unjustifiable and unreasonable" pricing. To set prices for new codes, the agency deflates prices to 1987 levels--the base year of the DME fee schedule--then inflates them using CPI increases.
In its proposal for national competitive bidding, CMS agreed that gap filling has flaws. Unfortunately, the agency doesn't plan to make any changes until it releases its final rule on NCB.
As part of its campaign, the industry argues that CMS must develop a new methodology if it wants to develop fair pricing for PMDs.