CMS Finalizes Capped-Rental DME Reclassifications

• By Laurie Watanabe
• Dec 03, 2013

Unmoved by letters from a large number and range of stakeholders, the Centers for Medicare & Medicaid Services (CMS) published a capped-rental final rule largely unchanged from its earlier proposed rule version.

The final rule, CMS-1526-F, was published Nov. 22 and reclassifies as capped rental a range of DME items previously in the "routinely purchased" category. The list includes a considerable number of products that the industry has defined as complex rehab technology (CRT).

In informing members of this latest development, Don Clayback, executive director of NCART, said in a Nov. 25 bulletin, "As you may recall back in August, NCART submitted comments, along with many other advocacy and industry groups, to the proposed rule identifying major problems. Our comments included very specific recommendations and changes. Unfortunately, in spite of receiving 172 letters from the public, CMS did not make any substantive changes."

In the final rule, CMS acknowledged receiving comments from "DME suppliers; manufacturers; professional, state and national trade associations; physicians; physical therapists (PTs); speech pathologists; occupational therapists (OTs); beneficiaries and their caregivers; the Veterans Administration (VA); and a state government representative."

Adult Tilt-in-Space Becomes a Capped-Rental Wheelchair

In its final rule, CMS summarized a number of comments it received, then said it disagreed with them.

In determining whether DME would continue to be routinely purchased or moved to the capped-rental category, CMS chose to use its purchasing data from 1986-87.

CMS noted that if a product was purchased by Medicare at least 75 percent of the time during 1986-87, the product would remain in the purchased category. But if the product was purchased less often than 75 percent of the time in 1986-87, the product would be reclassified as capped rental, with Medicare paying the provider a rental fee for 13 months. After 13 months, the equipment would officially belong to the beneficiary.

Critics immediately objected to CMS using purchasing data from so long ago - in part because newer types of technology didn't even exist 26 years ago and therefore would automatically be identified as being purchased less than the required 75 percent of the time.

Case in point: the potential reclassification of adult manual tilt-in-space wheelchairs (HCPCS code E1161).

CMS acknowledged it received "numerous comments" about the tilt-in-space code, and also about the pediatric wheelchair codes (E1232-1238).

"Some commenters stated many adult tilt-in-space wheelchair users require customization of equipment and require adjustment to reflect their unique postural and mobility needs," the final rule said. "The commenters stated a concern that payment on a rental basis for these items will increase the risk for orthopedic deformities due to improper support, increase the risk of pressure sores from poorly managed skin integrity, and will contribute to overall costs of medical care."

CMS also said it had received comments from stakeholders who "stated these items are used for chronic conditions or permanent disabilities, such as quadriplegia, paraplegia, multiple sclerosis, head and spinal injuries."

The importance of identifying the diagnoses of the beneficiaries typically using tilt-in-space chairs was two-fold, according to commenters. First, such medical conditions are acknowledged to be serious and permanent, thus eliminating the possibility that consumers would need tilt-in-space wheelchairs for only a short while. Second, the individualized needs of beneficiaries with such complex diagnoses require highly specialized and custom-fitted components - not the mass-produced, generic types of equipment usually in the capped-rental category.

But the final rule rejects those arguments: "As Medicare claims data from July 1986 through June 1987 does not exist for adult tilt-in-space wheelchairs, the data required by the regulation to classify these items as routinely purchased equipment does not exist, and these items will therefore be classified as capped rental items in accordance with this rule."

In other words, the tilt-in-space chair is newer technology that didn't exist in 1986-87. So it was routinely purchased zero percent of the time in 1986-87. Since zero percent is less than the 75 percent that's required for an item to remain in the routinely purchased category, adult tilt-in-space chairs were automatically relegated to the capped-rental category.

CMS acknowledged that it received comments objecting to using the 1986-87 purchasing statistics in the first place, in part because there would be no purchasing data on newer assistive technology products.

"Several commenters noted the clarification of the definition of routinely purchased durable medical equipment relies on 1986-87 as the base year and instead suggested using 2010-11 as a base year for determining new items classified under routinely purchased category," the final rule said.

In a July interview with Mobility Management, Rita Hostak, VP of government relations for Sunrise Medical, said that the 1986-87 timeframe is notable as the period used by CMS to create gap-filling policies.

In dismissing commenters' objections to using such old data, CMS said, "We do not agree with this comment. ... Although there have been numerous amendments to section 1834(a) over the years to address payment of certain DME, there have been no amendments to revise the definition of routinely purchased DME. Payment on a capped-rental basis avoids lump-sum purchases of expensive equipment that is only needed on a short-term basis and is more economical than purchase. ... In addition, we did not propose to revise the base period in the definition for routinely purchased DME.... We are therefore not adopting this suggestion to revise the base period for the definition of routinely purchased DME equipment."

Pediatric Chairs Also Affected

Another major category of concern for CRT stakeholders is pediatric wheelchairs, HCPCS coded E1232-1238.

Commenters' arguments were similar to the ones applying to adult tilt-in-space chairs. Stakeholders noted that children needing pediatric wheelchairs have severe and permanent disabilities impacting their personal mobility and would therefore need the chairs on a long-term basis.

This need would seem completely contrary to CMS's goal of seeking to rent short-term-usage equipment.

Bust much as with the adult tilt-in-space category, CMS brushed that argument aside, this time saying that 1986-87 data - using the pediatric wheelchair code in effect at that time - showed that pediatric chairs weren't purchased often enough.

"Claims for 'youth' or 'pediatric' wheelchairs were submitted using HCPCS code E1091 (Youth Wheelchair, Any Type) from July 1986 through June 1987, and this equipment was paid on a purchase basis 25 percent of the time during this time," the final rule stated. "This is well below the 75-percent threshold established in the statute; and therefore, classification of pediatric or youth wheelchairs as capped-rental items is required by the regulations."

The Impact on Access

Beneficiary access to equipment is a common concern any time CMS changes its policies, and such was the case regarding newly defined capped-rental assistive technology.

Much as it did with the onset of Medicare's controversial competitive bidding program, CMS said it doesn't expect beneficiary access to be negatively impacted because of its policy changes, but pledged it would monitor the situation.

"We recognize that consumers, occupational and physical therapists and disability advocacy groups have expressed concerns with these changes to acquisition policy for some durable medical equipment which persons with disabilities rely upon, including specialized wheelchairs and speech-generating devices," CMS noted. "Although we do not anticipate disruptions resulting from the transition from purchase to a capped rental, we understand the important role that this technology plays in maximizing the independence of persons with disabilities and their ability to direct their own care. Accordingly, CMS is committed to carefully monitoring beneficiary access using real-time claims data to ensure that there isn't an adverse impact."

Neither was CMS concerned with capped-rental administrative logistics, such as the fact that CRT wheelchairs are specially configured for each client and not generic items that can be easily reassigned to new beneficiaries.

"One commenter raised concern that suppliers spend multiple hours on supplies, labor and parts to customize a wheelchair; therefore, if patients become temporarily institutionalized, regress and need new customized parts, or pass away so that the wheelchair is returned to the supplier, the supplier would have a need to readjust and customize the chair to fit the needs of the next patient," CMS said.

"For items that are affected by this rule, we agree that some items may have a higher cost because they are not mass produced; however, such costs are accounted for in the fee schedule amounts that have been set based on supplier charges or price lists."

A Bright Spot: Wheelchair Accessories

Seemingly the lone CRT bright spot was the confirmation in the final rule that options and accessories supplied as part of a purchased CRT wheelchair would continue to be purchased outright.

"In this final rule, an exception is established so that wheelchair options and accessories furnished for use with purchased complex rehabilitative power wheelchairs can be paid under a routinely purchased basis," CMS said.

In all, 78 HCPCS codes are being moved to the capped-rental category as a result of the final rule, CMS said.

Fifty of the 78 affected codes are wheelchair related.

The final rule goes into effect April 1, 2014, though exceptions are being made for products already in the Medicare national competitive bidding program's round 2 or round 1 recompete. Those products won't be reclassified as capped-rental items until after the competitive bidding contracts expire.

To download and read the final rule, click HERE.