HCFA’s beneficiary upgrade proposal gets mixed reviews
By MATTHEW HAY
HHBR Washington Correspondent
BALTIMORE The Health Care Financing Administration (HCFA; Baltimore) last week released its long-awaited proposed rule for upgrading durable medical equipment (DME) purchased by Medicare beneficiaries. The proposed rule published in the Federal Register April 27 would permit Medicare beneficiaries to upgrade DME items that fall beyond HCFA’s criteria for medical necessity as long as they pay the difference in price.
"I think it is a good first step," said Dave Williams, director for government affairs at Invacare (Elyria, OH), who was instrumental in prompting HCFA to publish the proposed rule. "It is extremely workable on most fronts." He said he will go through a more thorough evaluation over the next few weeks with national trade groups and providers.
The DME upgrade provision was mandated by the Balanced Budget Act of 1997 (BBA), but is among the dozens of provisions for which HCFA has yet to promulgate regulations.
The proposal would permit Medicare suppliers to furnish upgraded DME on an assignment basis. Medicare payments would be made to the supplier as if the DME was not upgraded, and the beneficiary purchasing or renting the upgraded items would pay the supplier the difference between the supplier’s amount and the amount paid by Medicare for the non-upgraded item.
For example, HCFA explained that if a beneficiary wanted to upgrade a capped rental item and purchase an upgraded item that is in the routinely purchased payment category, the supplier would submit a claim for the non-upgraded capped rental item, and payment would be based on that item.
The supplier also would be required to use a code modifier to indicate that the upgraded item had been furnished. The rules governing the capped rental payment category would therefore apply to the routinely purchased item, and the supplier would be required to submit rental claims even if the upgraded item was in the routinely purchased category.
The supplier would be required to offer the purchase option during the tenth rental month as if the upgraded item were in the capped rental payment category, according to the proposed rule.
Williams said his major concern has to do with cases where the product transcends payment category, specifically capped rental to frequently purchased. "But our research and discussion with the carriers indicates that we can probably work through that," he said. The other limitation, he said, is imposed by the inadequacy of the HCPCS coding system.
The proposed rule also includes a number of consumer safeguards. For example, it includes a requirement that suppliers obtain and maintain a signed self-disclosure from the beneficiary certifying that they have been informed that non-upgraded DME is available. It must also include the manufacturer’s suggested retail price for the upgraded item, the supplier’s usual and customary charge for the upgraded item, the charge for the non-upgraded item, and the beneficiary’s out-of-pocket cost for the upgraded item.
Williams said the industry is not concerned with those protections and disclosures, but he added that the industry would probably try to modify the 30-day return policy, which mandates that suppliers must accept returns of upgraded items with full refunds if the beneficiary returns the item within 30 days. Williams said the industry would probably try to get that down "to something more reasonable."
"We are not happy that they limited the amount that suppliers can charge for the upgraded item to the Medicare fee schedule for that item, in effect limiting what the beneficiary can pay out of pocket," said another industry representative.
OMB gets industry input on CMNs
Williams and other industry and consumer representatives also met with the Office of Management and Budget (Washington) last week to discuss certificates of medical necessity (CMN) for DME. CMNs come up for annual review under the Paperwork Reduction Act.
One DME representative said the industry used the meeting to protest the practice of the durable medical equipment regional carriers to require documentation "above and beyond" CMNs for items that require CMNs. "Our feeling is that a CMN is supposed to demonstrate medical necessity," she said.
"It was the beginning of a dialogue," said Williams. "I think the message HCFA clearly got was that there needs to be a point in time in which providers have reached the burden of proof when it comes to determining medical necessity," he said
He added there needs to be a bright line that indicates that once a CMN has been completed and documentation has been accumulated, medical necessity is taken off the table as a reason to deny a claim.
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content