OIG: Eliminate maintenance fee

Sunday, November 30, 2003

WASHINGTON - By eliminating the semi-annual maintenance and service fee paid to HME providers once a capped-rental period ends, Medicare and its beneficiaries could save $100 million a year, according to the OIG.

That little bit of reimbursement math appears on page 10 of a 24-page report entitled: The Department of Health and Human Services and the Department of Justice Healthcare Fraud and Abuse Control Program for FY 2002. The report was released in September.

Instead of paying providers a maintenance and service fee every six months following the end of a 15-month capped rental period, the OIG recommends that CMS pay only for repairs when needed.

A five-year study begun in 1996 disclosed that Medicare paid “substantially more” for maintenance on rented equipment than it did for repairs on purchased equipment. Furthermore, an analysis of supplier documentation found only 9% of capped rental equipment received any maintenance and servicing, according to the report.

CMS agreed with the recommendations and stated it would consider a legislative initiative to eliminate the rental option.

Depending on a provider’s Medicare base, the semi-annual service and maintenance fee - 75% of the monthly allowable every six months - can add up to some serious cash. The idea that Medicare would end those payments frosts some providers.

“They look at what they want to see, and what doesn’t support their argument you never hear them whisper a thing about,” said Roger Miller, a division president for Air Products Healthcare.

For example, Miller said, he can understand why Medicare would want to pay only for actual repairs. But if they decide to do that, they also ought to make an adjustment for equipment that beneficiaries never return.

“How many times do providers have granny take off to San Diego with a wheelchair and never come back?” he said. “It becomes a lost asset. At least if you get a (semi-annual) payment it relieves some of your pain and suffering.”

Tom Andrews, marketing and operations manager for Merriam Graves in Charles-town, N.H. added: “I wish equipment worked 91% of the time. If I had to guess, I’d say 50% of every patient out there has multiple calls either during or after the capped period.”

If Medicare eliminates the maintenance and service fee, beneficiaries “can pay us when we make the call, and then we’ll submit an unassigned claim on their behalf,” Andrews said.