AAHomecare Studies Alternatives to Gap-Fill Pricing of HME

ALEXANDRIA, Va.–The American Association for Homecare has
commissioned the Washington-based research firm Muse &
Associates for a study on alternatives to Medicare’s gap-fill
pricing methodology for HME.

In addition to giving the Centers for Medicare and Medicaid
Services a basis for developing alternative price-setting methods,
in the longer term, the association said, the study will help to
establish a more formal process to ensure that the home care
community can share information with CMS about refinements to the
new price-setting methodology.

CMS has used the gap-fill method since 1989 to determine
Medicare fees for DME when the historic data needed to calculate
the fee schedules are not available. For example, if price lists
from 1986 to 1987 are not available and more current prices are
used, the Medicare carriers are instructed to decrease the more
current prices by a deflation factor to approximate the base-year
price for gap-filling. The deflation factors are based on the
percentage change in the Consumer Price Index (CPI) for all urban
consumers.

According to AAHomecare, the method presented problems last year
in CMS’ calculations of new allowables for cushion codes. The
agency has since alleviated the problem by allowing providers to
bill certain cushions under the miscellaneous category until future
code updates are released.

The association said that CMS is expected to use the current
gap-filling method to calculate fees for the new power wheelchair
codes announced earlier this month–unless the agency adopts an
alternative. “As we saw last September with the seating and
positioning changes, the existing gap-filling methodology created
problems in the calculations of the new allowables,” said
association President and CEO Kay Cox. “AAHomecare wants to propose
an alternative for pricing the new power wheelchair codes to avoid
the disruption to beneficiary access and care that will occur if
the fee schedule amounts do not accurately represent the technology
included in each code.

“The benefits of this study on gap-filling methodology will go
beyond power wheelchair codes. Repairing the flawed nature of
gap-filling will benefit every new technology that is introduced to
the marketplace,” Cox said.

Last year, AAHomecare commissioned Muse & Associates to
conduct a study on dispensing fees to compensate for drastic
Medicare reimbursement reductions in respiratory medications.
According to CMS, that study was ultimately used as a basis for the
drug-dispensing fee now in effect.

For more on CMS’ cushion codes, visit the Nov. 1, 2004,
HomeCare Monday, available by clicking
here. For more information on the new power wheelchair codes,
visit CMS’ DMEPOS homepage at www.cms.hhs.gov/suppliers/dmepos.