GAO likely to weigh in against DMERCs on their IR authority
By MATTHEW HAY
HHBR Washington Correspondent
WASHINGTON It appears increasingly likely that the General Accounting Office (GAO; Washington) will conclude in a report expected to be completed this spring that the durable medical equipment regional carriers (DMERC) overstepped their inherent reasonableness (IR) authority when they slashed reimbursement for certain durable medical equipment prosthetics orthotics and supplies last year.
The Health Care Financing Administration’s (HCFA; Baltimore) IR authority allows the DMERCs to increase or reduce reimbursement for individual items if the payment levels are found to be grossly deficient or excessive. But House Ways and Means Health Subcommittee Chairman Bill Thomas (R-CA) told HCFA Administrator Nancy Ann DeParle last year that he was concerned with the way HCFA and the DMERCs derived pricing data for enteral nutrition and five other items. His concerns prompted the GAO’s examination and forced HCFA to delay proposed IR cuts for those items.
In a proposed rule issued last fall, HCFA then sought to impose special payment limits for five items of DME and one prosthetic device based on its IR authority. The agency’s proposed rule would have slashed reimbursement for these items by anywhere from 22% to 57%.
Thomas then introduced legislation passed by Congress late last year that restricts HCFA’s IR authority until GAO completes its report to Congress and HCFA issues final regulations on their implementation of IR authority.
While the results of the study have not been made final, the National Association for Home Care (NAHC; Washington) and other trade groups are signaling that GAO has found evidence that does not support DMERCs’ IR methodology. NAHC says that such a finding could prompt Congress to restrict the agency’s IR authority more broadly.
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