CMS Ups Some PMD Fees Set to Take Effect Wednesday

BALTIMORE–After a strong rally by rehab industry stakeholders,
CMS upped reimbursement payments for some Group 2 and Group 3 power
wheelchairs Thursday.

The agency said the changes were made after reviewing comments
about the new power mobility device fee schedule, which will take
effect this Wednesday. Released Oct. 2, the schedule originally
called for cuts as high as 40 percent for some equipment (see
HomeCare Monday, Oct. 9). According to
CMS Acting Deputy Administrator Herb Kuhn, industry input on
product classification, errors in fee calculations and other
information led to a review “to really make sure we’ve got accurate
prices for these chairs.”

Laurence Wilson of CMS’ Chronic Care Policy Group said fees for
some of the 64 codes were increased “well over $1,000.”

CMS said that to revise the pricing it used the Aug. 23 product
classification list and pricing database generated by the SADMERC.
According to the agency, pricing was improved over the previous fee
schedule by adding the cost of features such as seat belts,
adjustable foot plates and solid-fill tires.

The agency also examined new manufacturer data; revised its
formula to ensure that inflation factors were applied uniformly;
and made sure heavier weight power wheelchairs were not priced
lower than those of standard weight because of a lack of data.

Reaction to the revised schedule so far has been mixed.

According to Sharon Hildebrandt, executive director of the
National Coalition for Assistive and Rehab Technology, “On the
whole, we’re really quite pleased … We just want to verify their
methodology and how they came up with the prices.”

Hildebrandt said she expects more information this week on
exactly what items were included in the calculations for the basic
equipment package CMS included in the fees.

Provider Tim Pederson, CEO of WestMed Rehab, Rapid City, S.D.,
and vice president of AAHomecare’s Rehab Council, said, “While not
perfect, the Group 3 fees are a definite step in the right
direction … We had considered discontinuing PMD services to
Medicare beneficiaries after Nov. 15. I am happy to report that we
are no longer considering that action.

“I believe with careful product selection, providers can
continue to provide complex rehab and assistive technology to
Medicare beneficiaries.”

But in a statement issued Friday, the Washington-based Power
Mobility Coalition said although “this slight bump in price for
Category 2 PMDs is welcomed, the revision does little to alleviate
concerns that steep price reductions will force suppliers to close
their doors and beneficiaries to have few, if any options, for
quality equipment and service.”

The revised schedule still cuts reimbursements up to 35 percent,
the PMC said, with a $300 increase for Group 2 chairs still
representing a 25 percent drop.

Following is a CMS summary of how it refined the new fee
schedule:

• CMS is using the best available data for computing the revised
  fees. CMS is now using the Aug. 23, 2006, product classification
  list and pricing database generated by the SADMERC. The Aug. 23rd
  classification list is the most current database that reflects the
  full and complete manufacturer applications, test results, and
  attestation, consistent with CMS’ published requirements, and has
  undergone a thorough review by CMS and the SADMERC. Our
  comprehensive review found that later versions of the database do
  not meet these requirements, and so are less reliable and may
  reflect faulty data and attempts to manipulate prices. Examples of
  key data improvements include–

• Certain PMDs with questionable test-results that are produced
  off-shore are now eliminated from the calculations.

• CMS has ensured that data submissions by manufacturers related
  to PMDs (and MSRPs) that are merely under development and not yet
  being produced are not included in the pricing database. Some
  manufacturers submitted data regarding chairs that have not yet
  been produced and distributed but are merely design concepts for
  chairs potentially under development. Some believe these chairs are
  slated for production off-shore. Since the product was not
  available, testing and application results are not verifiable and,
  therefore, these products have been eliminated from the list.

• Undocumented test results and incomplete applications submitted
  without the proper attachments and attestation are now
  excluded.

• The new coding set “bundled” certain basic equipment
  requirements into the codes based on the clinical needs of
  beneficiaries. Some manufacturers did not include all elements of
  the basic equipment package as bundled features in the MSRP
  submitted for the code. As part of its detailed review, CMS
  corrected manufacturer’s suggested retail price (MSRP) data by
  adding the value of these items to ensure that prices for certain
  basic equipment (e.g., seat belts, adjustable, foot plates,
  solid-fill tires) that were supposed to be included in the data
  submissions are now reflected in the fees.

• In calculating the new fees, CMS revised the formula to more
  accurately reflect the year of submission of the MSRP data. As part
  of the gap-filling formula and calculation, we deflate the current
  MSRP back to price levels in the base year of the fee schedule
  (1986). By more accurately reflecting earlier MSRP starting dates,
  the number of years of deflation in the gap-filling process was
  decreased, resulting in an upward effect on the final fees. (Note
  that CMS later applies the appropriate inflation updates to the
  base year amount.)

• In calculating the new fees, CMS ensured inflation of the data
  from the base year for the fee schedule to the present was based on
  uniformly applied inflation factors reflecting the updates mandated
  by Congress. This resulted in increases for two fees.

• CMS also ensured that anomalies in pricing that resulted from a
  lack of data for certain codes were corrected using data for
  comparable products. For example, CMS ensured that heavy weight
  PMDs were not priced lower than standard weight PMDs.

• CMS also withdrew fees for Group 4 (high activity) and Group 5
  (pediatric) PMDs from the fee schedule since these are items that
  would rarely, if ever, be covered by Medicare.

According to CMS, the results of the refinements are that:

• The changes to the fee schedule will improve the accuracy of
  Medicare payments for mobility technology.

• Prices for complex rehabilitation (Group 3) PMDs used by the
  severely disabled will increase significantly compared to the fees
  released in October. They will now be at a level consistent with
  fees based on manufacturer suggested retail prices for products
  verified to be group 3 products based on complete code verification
  requests as of Aug. 23, 2006.

• The fee for the most commonly provided standard geriatric
  mobility (Group 2, standard weight captain’s chair) PMD increased
  by $301 compared to the fees announced in October.

To view the revised prices, click here.