Industry Calls PMD Fee Cuts ‘Devastating’

WASHINGTON–CMS’ new fee schedule for power mobility devices
slashes reimbursement by more than 40 percent for some equipment,
prompting stakeholders to warn that it will be difficult, if not
impossible, for providers to remain profitable in the rehab
business.

The updated fee schedule, released Monday, takes effect Nov.
15.

“The new pricing is going to be devastating,” said Rita Hostak,
vice president of government relations for Longmont, Colo.-based
Sunrise Medical and president of the National Coalition for
Assistive and Rehab Technology. “For a lot of suppliers it’s going
to mean they’re not going to be able to provide product
anymore.”

Hostak said many of the providers she talked to after the fee
schedule was issued indicated they were trying to decide whether to
allow their rehab techs to continue performing evaluations.

Gerry Dickerson, director of rehab technology for Queens,
N.Y.-based MedStar Surgical, a full-line HME with a rehab staff of
eight, said he wasn’t sure what to do after he heard the news. “I
sent two Medicare recipients home and said, ‘Until we figure out
what we’re doing, there’s no sense even proceeding because we can’t
provide you with equipment.’”

As an example of the drastic fee reductions, Hostak said
reimbursement levels for both the Group III no-power option and
single-power option wheelchairs have dropped by 32 and 34 percent,
respectively. “Those are substantial hits to an industry that
didn’t already have significant margins to begin with,” she
said.

Particularly with regard to complex rehab products, providers’
service component is expensive when it comes to time and labor,
Hostak said. In addition to clinicians’ evaluations, providers also
must make extensive home assessments involving time and labor.

With those considerations, the new fee schedule deals “a
potentially fatal blow to at least the rehab industry,” Hostak
said, while the impact of the reductions “certainly will be felt
significantly by everybody who provides power mobility.”

Having fewer providers in the market would limit beneficiaries’
access to the equipment they need, according to Hostak and other
power mobility stakeholders, who responded to the fee schedule with
an immediate outcry:

• Elyria, Ohio-based Invacare Corp. said that reductions of up to
  41 percent for high-end products used by severely disabled
  consumers–those with diagnoses like amyotrophic lateral sclerosis,
  muscular dystrophy, cerebral palsy, spinal cord injury and severe
  brain injury–will prevent those consumers from having access to
  the appropriate power wheelchair unless they have the means to
  purchase it themselves.

  For consumer/geriatric mobility, the proposed fee schedule calls
  for reductions from 21 to 44 percent, which also will prevent many
  seniors from receiving the right PMD, Invacare said.

  “CMS must retract the October 2 PMD reimbursement levels and
  work with consumers, physicians, providers and manufacturers to
  establish fair prices that ensure consumer access to the medically
  appropriate power mobility device,” stated Invacare Chairman and
  CEO Mal Mixon.

• According to Seth Johnson, vice president, government affairs,
  for Pride Mobility, Exeter, Pa., and chairman of the American
  Association for Homecare’s Rehab and Assistive Technology Council,
  “We think the levels of these reductions are unsustainable and are
  going to force Medicare beneficiaries into inappropriate products.
  [This] will cause unnecessary harm to all stakeholders–Medicare
  providers, beneficiaries and certainly manufacturers.”

  The RATC plans to ask Congress and CMS to stop any
  implementation of the fee schedule until fair prices are
  established. “We have six weeks before the Nov. 15 implementation
  deadline to impress upon CMS and Congress the need to make
  significant changes to the published fee schedule amounts,” Johnson
  said.

  AAHomecare called on rehab providers to contact their members of
  Congress about the fee schedule and ask them to intercede with
  CMS.

• The VGM Group, Waterloo, Iowa, said in a statement on its Web
  site that several legislators have indicated they would assist the
  industry in correcting inadequacies within the fee schedule via
  legislative or regulatory action.

  “Now that the fee schedule has been released, we (VGM, U.S.
  Rehab, NCART, [AAHomecare’s] RATC and several prominent vendors)
  will be working closely with these key legislators and others to
  voice strong concerns with the level of these cuts in reimbursement
  for PMDs,” VGM said. “It is clear that many of these new fee
  schedule amounts are totally unreasonable and must be
  corrected.”

• The Restore Access to Mobility Partnership, a coalition of
  manufacturers and suppliers, noted in a statement that a supplier
  who has been receiving a $6,500 reimbursement from Medicare for a
  wheelchair needed by people with the most severe physical
  disabilities would only receive $3,800 after the new pricing is
  effective.

  The group said over the last three years “CMS has responded to
  the increased demand for mobility equipment with a series of
  policy, rule and pricing changes that appear to be aimed at
  restricting beneficiary access to mobility equipment, crippling the
  industry that supplies it and restraining costs.”

  RAMP also said CMS “has taken a very shortsighted view because
  Medicare beneficiaries with power mobility equipment save the
  Medicare system millions of dollars because they require less home
  care, hospitalization and emergency treatment from falls and
  fall-related injuries.”

In an explanation accompanying the fee schedule, CMS said that
“from 1995 to 2003, expenditures for power wheelchairs increased by
an astonishing 2,705 percent, from $43 million to $1.2 billion in
just over eight years. In response, CMS has developed a
comprehensive strategy to address timely and appropriate coding,
payment and coverage of PMDs.”

The agency said pricing in the new fee schedule was based on
manufacturers’ suggested retail prices, and that in August the
prices had been shared with the industry, which was allowed to
provide comments. “We shared this information with the industry and
took their comments into account in setting the fee schedule
prices,” said a CMS spokesperson. “Prices were set using the
standard gap-filling process, which is familiar to the
industry.”

However, according to Invacare and other equipment-makers,
gap-fill pricing methodology “has been universally recognized as
flawed by CMS’ own admission, and it does not take patient needs
into account.”

Johnson said the pricing information that CMS put out for
comment was “simply pricing source information” and not gap-filled
pricing, adding that the industry had supplied numerous comments
recommending that the agency use an alternative method of
establishing fees. “These reductions are clearly excessive,” he
said, “and unjustifiable from my perspective.”

Meanwhile, MedStar Surgical’s Dickerson, a 30-year veteran of
the rehab industry and an NCART board member, cancelled a clinic
Tuesday to “try to figure out [what to do] because I just can’t get
my head around this.

“I can’t understand how what seem to be reasonable people are
doing this to the beneficiaries,” he said.

To view CMS’ fee schedule amounts for PMDs, click here.