Medical necessity, fee schedules, coverage criteria, ICD-9 codes… how much do you really understand about how insurance companies, Medicare or Medicaid purchases the mobility and rehab equipment that you use? Do you know how a funding source determines what home medical equipment is covered and what isn't? Here's all you ever wanted to know about funding, but were afraid to ask -- and why you need to understand how the reimbursement system works.
The Role of Funding Sources
In most cases, you can purchase whatever home medical equipment (HME) you want -- from wheelchairs to scooters to bath safety equipment -- if you have the funds to pay for it yourself. But HME can be quite expensive -- after all, a wheelchair or scooter functions as a person's legs, and a bathtub lift may substitute for a caregiver's arms, back and shoulders. These are complex pieces of assistive technology that lift, carry, position and provide mobility -- and have to do so safely and repeatedly, thousands of times. That engineering and technology cost money.
Most consumers who use HME rely on other funding sources, such as insurance companies, Medicare (a federal health insurance program for those 65 years and older or people with disabilities or certain medical conditions) or Medicaid (a state-administered health insurance program for low-income families and individuals, and people with disabilities), to purchase the equipment or at least offset some of the considerable cost.
Even if you're not a beneficiary, Medicare can impact you because insurance companies and Medicaid often base their payment and coverage policies on Medicare policies. Medicare policies have a huge impact on how other funding sources act.
And with Medicare, the HME process begins with a prescription.
Proving Medical Necessity
Medicare -- and most other funding sources -- will only pay for beneficiaries' HME if the equipment is "medically necessary." That means a physician needs to write a prescription for the HME, just as a physician writes prescriptions for medications or medical tests.
To justify the medical necessity of HME, a physician must describe why the equipment is needed. The physician needs to note the existing medical condition and possibly why a less complex (and less expensive) piece of medical equipment is not appropriate. For instance, if a physician prescribes a power wheelchair, he/she needs to explain why a manual wheelchair will not suffice (perhaps because the patient does not have sufficient balance or upper-body strength to propel a manual wheelchair).
If the patient has a progressive condition such as ALS, the physician may also explain how symptoms are expected to evolve and why more complex equipment may be required in the near future.
In some cases, as with wheelchair cushions, the patient's diagnosis is critical to determining whether the patient qualifies for certain types of equipment. Health care providers use ICD-9 codes to indicate a patient's official diagnosis.
Based on current medical needs, anticipated future needs, self-care activities that need to be performed and a consumer's physical and cognitive abilities, the consumer's "health care team" may then try out different types of equipment and recommend the specific equipment that Medicare should purchase for the consumer to use. The health care team may include the supplier who builds/sells the HME, an occupational and/or physical therapist, the consumer, caregivers, family members and even school personnel, if the equipment user is a child. Rehab technology supplier (RTS) is the title given to HME suppliers who create custom and complex wheelchairs and seating systems for consumers with especially challenging disabilities.
Regardless of what a physician prescribes and what the health care team recommends, Medicare has the authority to approve or deny an HME claim.
What's It Worth to You?
Medicare sorts and classifies wheelchairs and scooters (also known as power-operated vehicles or POVs) according to weight capacity, options and functionalities, such as tilt or driving controls that are programmable. Medicare also determines how much it is willing to pay for each type of equipment, whether it's a power wheelchair or a headrest. That price is commonly called an allowable; the sets of allowables are often called fee schedules.
Equipment manufacturers are free to set whatever prices they want for their products, of course, and so are HME suppliers. But Medicare will only pay a pre-determined amount (allowable) regardless of what manufacturers and suppliers charge for their products. So, HME manufacturers and suppliers don't dictate their prices to Medicare. HME manufacturers and suppliers also do not determine whether a beneficiary medically qualifies for equipment.
What Is Competitive Bidding?
Although Medicare currently determines the prices it will pay for HME, it plans to roll out a competitive bidding program -- also called competitive acquisition -- this year to save money on the types of HME that it buys in relatively large amounts.
Under this new program, Medicare will choose the types of equipment to "competitvely bid" among HME suppliers. Medicare will ask suppliers in various metropolitan areas how cheaply they are willing to sell that type of equipment. Only HME suppliers who submit "winning bids" will be eligible to sell that type of HME to Medicare beneficiaries on behalf of Medicare.
How will this affect the way you purchase equipment? Medicare beneficiaries will no longer be able to choose which HME supplier to do business with. Instead, beneficiaries will be required to patronize only HME suppliers who have won the right to sell products, largely by underbidding their competitors. Since Medicare is only required to approve a certain number of HME suppliers in a given area, beneficiaries may have to travel much farther to find an approved supplier. Or beneficiaries who have long-established relationships with their suppliers will have to start all over with new suppliers they don't know.
To honor the low-cost bids they submitted to Medicare, winning suppliers may find they need to reduce customer service, forego some employee training and education, reduce staff sizes, reduce the quality of employees they hire, reduce the numbers of product choices they offer and find other ways to cut costs as much as possible.
Those actions could reduce the quality of service you receive from your supplier and negatively impact your overall HME experience.
What Can I Do About This?
A number of organizations headed by industry members, medical professionals such as occupational and physical therapists, and consumers are working to make sure consumers can get the HME that's most beneficial to their medical and lifestyle needs, regardless of current funding obstacles. Check them out:
ITEM Coalition -- Independence Through Enhancement of Medicare & Medicaid Coalition is a consumer group that seeks to reform Medicare/Medicaid as a whole. Web site: www.itemcoalition.org.
RAMP Coalition -- Restore Access to Mobility Partnership. An advocacy group of consumers and wheelchair/mobility industry members working to ensure that consumers receive the mobility equipment they need. Web site: www.rampcoalition.org.
Users First Alliance -- Led by HME manufacturers Permobil, The ROHO Group and TiLite, this new organization wants to make consumers -- not funding issues -- the focal point of the HME industry. Web site: www.usersfirst.org.
In addition, the American Association for Homecare (AAHomecare) is an industry organization of HME suppliers and medical professionals that advocates the overall value -- medical, social, emotional and financial -- of people with disabilities or medical conditions remaining in their homes versus moving to acute care or long-term care facilities. Web site: www.aahomecare.org.
These organizations and others like them frequently seek consumer input and experiences to use as examples when they lobby legislators for change. Sharing your stories and concerns can empower not only yourself, but potentially everyone who uses mobility or rehab equipment to live life to the fullest. And shouldn't that be the ultimate goal of HME?