What Happened to CMS's Proposed K0108 Changes?
January 2016 was supposed to be the start of a new way
for the Centers for Medicare & Medicaid Services (CMS) to handle
miscellaneous complex rehab technology (CRT) and durable medical
equipment (DME) codes.
K0108 (CRT) and E1399 (DME) miscellaneous HCPCS codes would
be replaced by six new codes. Existing K0108 or E1399 items would be
sorted into a new code based on whether they cost more or less than
$150, and whether or not they were part of a repair situation.
That announcement came in the summer of 2015. Then in October,
CMS issued an update: “We appreciate the comments received on the
proposed coding changes… and will continue to consider the issue
further. The changes described… will not take effect on Jan. 1,
2016. Additional information will be provided on the
status of these coding changes in the future.”
What Happened & Why
The CMS statement was very brief and offered no details
into what appeared to be an abrupt about-face in plans.
Behind the scenes, industry organizations and at least several CRT
manufacturers took a deeper look at what the new six codes could
mean based on their own K0108 product lists. They then presented that
information to CMS.
In essence, said Jim Stephenson, rehab reimbursement & coding
manager for Invacare Corp., CMS’s proposal of six new codes was an
attempt to streamline the reimbursement and processing workflow for
a very large, disparate group of products.
“Instead of having to manually review and manually price K0108, now
they would have a specific code with a specific fee schedule to where if
this particular product falls within this price range, this is how much it’s
getting paid, regardless [of what the product was],” Stephenson said.
So a previously coded K0108 product that cost less than $150 would
be reimbursed at a set amount, and a K0108 item that cost more than
$150 would be reimbursed at a second set amount. But what sounded
like a cut-and-dried formula proved more complicated when actual
products were plugged in.
Stephenson pointed out that K0108 items varied widely not only
in cost, but also in how often the items were used. Some K0108 items
were routinely included in mobility system claims, while other K0108
items were only rarely used by ATPs.
“Once [CMS] started getting feedback from the industry, they came
to realize they were going to be paying more money for most things
because there weren’t as many high-end K0108 items as what they had
thought,” Stephenson said. CMS had expected to save money on highcost
K0108 items by plugging them into a formula that would require
CMS to pay far less than the agency previously had. In reality, though,
CRT manufacturers pointed out that those high-priced items were not
used very often.
And those less expensive K0108 items? Under the new formula,
CMS would have paid much more than it had before — and doing so
frequently, since those lesser-cost items were frequently used.
“Up to $150 was getting paid one way, over $150 would get paid
another way,” Stephenson said. “So if you sent in a claim for a [K0108-coded] bag of screws that cost a dollar, the allowable for
that particular code was going to be [approximately] $86.
[Providers] were going to make out like a bandit.
“There were going to very few times where those items
over $150 were going to be billed. When they were, there
weren’t going to be so many of them that providers would lose
enough to offset the amounts they were being paid for the lower-end
Stephenson said Invacare analyzed its list of K0108 components
and concluded that CMS’s proposal would inadvertently end up being
very expensive to the agency and its beneficiaries. Only a handful of
Invacare’s many hundreds of items would have fallen under the more
expensive new code, and the few items that did were relatively rarely
used. The vast majority of K0108 items would shift into the new under-$150 code, and thus be reimbursed at a much higher rate than what
Medicare was currently paying.
Was there any thought of letting CMS go ahead with the policy
anyway? Apparently, industry organizations and manufacturers who
crunched the numbers thought of beneficiaries and the industry’s
ongoing relationship with CMS when deciding to take the high road.
“We have to be good stewards on our end if we expect them to give
us anything in the future,” Stephenson said.
As far as what’s next for the 2015 proposal, Stephenson said he
hadn’t heard any news at press time.
Paul Komishock, general manager of government affairs for
Quantum Rehab, said he hasn’t heard further conversation on last year’s
proposal, or a replacement one.
“There has not been any further discussion on revising the miscellaneous
codes,” he said. “One of the issues with these proposed codes
was that there would be a standard fee set for a miscellaneous wheelchair
accessory. As the industry correctly pointed out, this would have
inflated payments for very inexpensive items and reduced payments for
very expensive items. When such a broad range of items are covered in
a miscellaneous code, it’s very difficult to standardize pricing.”
That suggests that though the processes surrounding it are imperfect,
K0108 will remain in the CMS funding equation…for now.
This article originally appeared in the May 2016 issue of Mobility Management.