Providers await new ostomy rates

Thursday, February 28, 2002

WASHINGTON - CMS is slated to release fee schedules for the new temporary ostomy codes this month, and industry sources say it's anyone's guess what it'll come up with for reimbursement rates.

Why? Industry sources say it's a tale of numbers, and depending on which side of the fence you're on, the urgency to get HME suppliers to stock and take assignment on ostomy supplies is either real or exaggerated.

The 20 new ostomy "K" codes are scheduled to go into effect April 1. They include everything from non-pectin based paste (K0561) to flange-locking mechanisms for pouches (K0580).

According to CMS, assignment rates for ostomy supplies has remained just about steady over the past five years: In 1996, it reports a 69% assignment rate; in 2001, it reports a 73% rate. For two common ostomy codes, A5123 (skin barrier with flange) and A5063 (drainable ostomy pouch with flange), it reports even higher assignment rates for the same period: from 71% to 79% and from 74% to 79%, respectively.

But ask the United Ostomy Association (UOA) and ostomy suppliers, and it's a different story.

"It's like we're in a Mexican standoff," said Collin Cooke, a consultant for the Irvine, Calif.-based UOA.

The UOA claims CMS's 73% assignment rate is misleading because it's based on what CMS calls "individual services." Cooke said just because 73 out of 100 pouches, for instance, were reimbursed on an assigned basis doesn't necessarily mean 73 out of 100 beneficiaries received assignment rates.

"One 'individual services' could entail more than one pouch," he said.

Even if CMS is on target with its 73% assignment rate, the UOA, citing a 2001 OIG report, claims ostomy supplies have the lowest assignment rate of all DMEPOS. That flies in the face of what the initiators of Medicare intended - that beneficiaries are responsible only for 20% of the cost of supplies, the association says.

A representative of CMS says the low assignment rate may just be an indication that other DMEPOS, such as DME at 99%, have assignment rates that are too high, and it's paying too much. HME