CMS Releases 2005 DME Fee Schedule; Cuts Vary by State

Washington

CMS has released its much-anticipated 2005 DME fee schedule, which includes reimbursement cuts less than many industry observers had feared.

“There are reductions [in the fee schedule] we are not happy to see,” said Cara Bachenheimer, vice president of government relations for Elyria, Ohio-based Invacare, “but they are somewhat less than we anticipated.”

According to Bachenheimer, cuts from 2004 reimbursement levels vary widely from state to state and range as follows:

• diabetic test strips (A4253): 0 to 4 percent
• diabetic lancets (A4259): 0 to 5 percent
• semi-electric bed (E0260): 1.6 to 16 percent
• power pressure-reducing mattress (E0277): 0 to 7 percent
• nebulizers with compressor (E0570): 4 to 18 percent
• manual wheelchair (K0001): 0 to 2.5 percent
• power wheelchair (K0011): 0 to 3.3 percent

According to the American Association for Homecare, the maximum Medicare fees and capped rental payments listed for the equipment in 2005 are as follows: test strips, $36.94; lancets, $12.06; hospital beds, $140.46; air mattresses, $703.51; nebulizers, $16.11; manual wheelchairs, $53.27; and power wheelchairs, $512.29.

Mandated by the Medicare Modernization Act, Medicare’s new fees for these items are based on Federal Employees Health Benefit Plan (FEHBP) median pricing derived from an HHS Office of Inspector General report released in 2002. Cuts to oxygen reimbursement, also mandated by MMA, were to be announced this month, the agency said.

“This law [MMA] brings Medicare fees down to FEHBP median levels,” a CMS official told HomeCare. “States with the highest fees came down by the highest percentage. States with fees closer to FEHBP levels were not reduced as much.” States with fees at or below the FEHBP median, he said, did not change.

The calculation method “was rather equitable,” said Asela Cuervo of the Law Offices of Asela Ceurvo, Washington, D.C. “If the state fee was already at or below the FEHBP median, then it would be even more draconian to add another cut on top of that.”

Seth Johnson, director of government affairs for Exeter, Pa.-based Pride Mobility Products, said the average cut for power wheelchairs stands at 2.6 percent, compared with 3.28 percent as mentioned in the OIG’s report. “No reduction [in reimbursement] is good,” he said, “but it’s less than what we expected. That’s positive.”

At press time, Bachenheimer said the game plan for the industry should be to keep pressure on Capitol Hill, as H.R. 4491 — a bill that would repeal the FEHBP-based cuts — remained in the pipeline. The co-sponsor count for the bill, drafted by Reps. David Hobson, R-Ohio, and Harold Ford, D-Tenn., stood at 113.

“It’s important to keep the political pressure up,” Bachenheimer said, “because we believe CMS responded to the political pressure by lessening these cuts.”

Next year’s oxygen fees will be based on another OIG report released in September that recommended CMS cut payments between 10 and 20 percent. According to the CMS official, the oxygen cuts will be calculated the same way as the other FEHBP-based cuts: states with oxygen fees higher than the FEHBP median will experience higher reimbursement cuts.