Study: Gap filling would reduce PWC reimbursement by 25%

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Sunday, September 18, 2005

WASHINGTON - If CMS uses its current gap-filling methodology to determine prices for Medicare's new power wheelchair codes, the average reduction in payment will be about 25%, according to a new AAHomecare commissioned study.

AAHomecare presented the Muse & Associates study to CMS Sept. 14.

Gap filing employs a formula that deflates prices to 1987 levels (the base year of the DME fee schedule), then inflates prices by 4% a year to 2004. When it comes to technology developed after 1987 -- the case with many of today's wheelchairs -- gap filing often skews prices to unacceptably low levels.

By adjusting gap filing to reflect more accurate pricing information, the
average reduction in payments for the new power wheelchair codes would be about 9%, according to the survey.

According to Muse & Associates:

* Of all the power wheelchair products surveyed, only nine had historic price information prior to the year 2000.

* The survey showed that the current power wheelchair product with the oldest historic pricing information had an average price increase of 1% per year since 1992.

Muse stated that:

CMS gap-filling methodology overstates the actual price increases in power wheelchair equipment, as confirmed by the Nonprescription Medical Equipment and Supplies Index and the Muse & Associates survey. CMS could impute 1992 as the historic pricing year for all power wheelchair equipment.

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