PMD pricing: AAHomecare wants answers

Sunday, November 26, 2006

ALEXANDRIA, Va. - In a letter to CMS last week, AAHomecare outlined several problems with the new pricing for power mobility devices that, despite numerous revisions, still remain unresolved.

The pricing, as well as new coding and coverage criteria, went into effect Nov. 15.

AAHomecare pointed out:

* There are discrepancies in CMS's methodology. First, the agency excluded from its computations 250 of the 443 models classified by the SADMERC. While it excluded most models from major American manufacturers--Hoveround, Invacare, Pride Mobility and Sunrise Medical--it included most models from major foreign manufacturers--Merits and Shoprider. "Consequently, fee schedule amounts are understated," the letter stated. "We find this discrepancy striking." Second, in some cases, the MSRPs that CMS used are much lower than the MSRPs that manufacturers gave to the SADMERC. For example, four Hoveround models are "understated" by as much as $1,320.

* While the agency has adjusted pricing for PMDs in Group 3, it hasn't "performed a similar process" for the devices in Group 2. For example, the agency increased pricing for K0851, a Group 3 chair, by $547, but it increased pricing for K0823, a similar Group 2 chair, by $3.50. "The agency's seemingly inconsistent approach further underscores the importance of the agency disclosing its rational for all MSRP adjustments," the letter stated.

* There are numerous mathematical errors that, overall, resulted in pricing that's 3% lower than it should be.

* While the association recognizes that CMS made "significant modifications" for PMDs in Group 3, the agency needs to further revise pricing to reflect multi-power option devises. To do this, CMS could add the current allowable for E2320 to the allowables for the Group 3 multi-power codes.

AAHomecare's conclusion read: "CMS must explain the criteria it used to decide what products to include (or exclude) from its computations and the basis for using those factors instead of others. We also request that CMS explicitly describe its rationale for adjusting the reported MSRP for some devices, but not others; and its support for making different adjustments to the MSRP for different products. The lack of explicit information on CMS's approach to developing the fee schedules seriously limits our ability to evaluate the impact of CMS's action."