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 also made a comeback in 2009, with one less
Metropolitan Statistical Area (MSA) and one less category than the
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
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
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)
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
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.