Funding Essentials

Closing the Books on 2009 & Forecasting 2010

As 2009 winds down, a look back at what transpired can be useful in gauging what’s in store for the year to come.

This past year has presented the industry with its share of challenges, and 2010 promises to continue this trend in a number of areas. As baby boomers continue to move into the Medicare program in 2010, the market for HME will only continue to expand. Still, there will be many important issues facing the HME industry and affecting providers of power mobility. Let’s examine four of the most pressing issues for the year ahead.

First-Month Purchase Option

The removal of the first-month purchase option for power wheelchairs for Medicare beneficiaries remains the greatest threat facing power wheelchair providers in 2010. An elimination of this option appeared in legislation in both the House and Senate once again, and the threat looms large this year as “pay for” stakes are much higher than in years past.

That said, support from consumer groups and other stakeholders for preserving the purchase option has never been stronger, as the impact on beneficiary access to power wheelchairs and the economic impact of such a change have never been more severe. The Medicare program and beneficiaries actually save 5 percent per chair when it is paid for in a lump sum as opposed to Medicare’s own methodology for capped rentals.

Alternatives were offered in an attempt to provide some cost savings while preserving the purchase option.

The “claw back” alternative calls for the first-month purchase option to remain in place, but requires that a provider refund Medicare the difference between the purchase amount and the cost of a 13-month rental for any beneficiaries whose medical need ends prior to the 13th month. The “holdback” alternative would also preserve the purchase option, but would require Medicare to withhold a certain percentage of the total purchase payment in escrow until after the 13th month. These alternatives demonstrate a good-faith effort on behalf of the industry and would result in a small cost savings to the program and underscore the need to retain the first-month purchase option.

Recovery Audit Contractors will be paid based on the errors they find, so a challenge for the industry is to ensure that the RACs and DME MACs are consistent

Competitive Bidding

Competitive bidding also made a comeback in 2009, with one less Metropolitan Statistical Area (MSA) and one less category than the first go-around.

Group 3 complex rehab power wheelchairs are now exempt, but Group 2 complex rehab power wheelchairs are included in competitive bidding. Other than these legislative modifications, the program did not undergo any other significant changes or improvements from the original first round. Much of the Centers for Medicare & Medicaid Services’ (CMS) 2010 will be spent evaluating bids, offering contracts, locking in the winning bidders and educating suppliers, beneficiaries and referral sources in the Competitive Bidding Areas (CBAs).

The potential outcome of the rebid and the single payment amounts that result could have far-reaching consequences, as CMS may look to impose the winning bid amounts onto the rest of the country, partially in response to a recent Office of the Inspector General (OIG) report on wheelchair pricing.

The program includes all Group 2 power wheelchairs, including single- and multiple-power option complex rehab power wheelchairs. Since most power wheelchairs are uniquely configured to meet the physical, functional and environmental needs of the individual, it will be imperative for companies that submit a bid in the power wheelchair category to do a thorough evaluation of all costs associated with providing the products and services covered by the bid amount for each HCPCS code.

Complex Rehab Separate Benefit Category

Complex rehab stakeholders will continue their efforts to establish complex rehab as a separate benefit category in the Medicare program in 2010.

Defining exactly what a complex rehab product is, what it does, who it should be prescribed for and the roles, responsibilities and expectations of those who provide it will be essential in 2010, as stakeholders work together to outline the process for Medicare. Establishing a well-defined separate benefit category will ensure beneficiary access and will acknowledge that the provision of such equipment requires a much broader baseline of services than typical DME.

While it’s unclear whether a legislative or regulatory strategy is the best approach to accomplish this task, all relevant measures are being considered in the development of a best practice model that translates into coverage and payment policies that are fair, equitable and sustainable.

Audit Activity, Documentation & the Industry Response to the OIG

In 2009, several DME MAC Jurisdictions began conducting various types of audits regarding code K0823 (Group 2 standard power wheelchair with captain’s chair). A provider can ensure that audits go smoothly by confirming that the medical records they receive from their referral sources contain the necessary information to support the need for the product.

A third-party review of a sample of claims may also help in determining whether a provider has obtained appropriate documentation. That said, clearer documentation standards are needed and would go a long way toward protecting access to this Medicare benefit in the future.

Next year we will see the Recovery Audit Contractors (RACs) begin to assert themselves. These contractors will audit Medicare claims from all parts of Medicare (including those from the DME MACs).

The Recovery Audit Contractors will be paid based on the errors that they find, so a challenge for the HME industry is to ensure that the RACs and DME MACs are consistent as far as claim information and content is concerned, and that the expectations of what makes a claim compliant are similar. The same will also be true for the Comprehensive Error Rate Testing (CERT) contractors.

Last year, the OIG released a report on the acquisition costs and services related to the provision of power wheelchairs that — by their own admission — did not consider the significant costs involved in the provision of power wheelchairs, including the required services and various costs associated with complying with the Medicare supplier standards and the DMEPOS quality standards. So, the remainder of 2009 and 2010 will once again be spent educating legislators and CMS on the costs associated with the provision of these products and services.

As they have shown in the past, DME providers are resilient and adaptable. These traits will only help to further the industry’s success, no matter what the landscape may look like in 2010.

This article originally appeared in the November 2009 issue of Mobility Management.

About the Author

Paul Komishock is general manager of government affairs for Pride Mobility Products Corp.

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