Why ‘Round Zero’ Was Zapped

The HME industry achieved a rare victory on Dec. 29 with Medicare’s last-minute delay of a demonstration project requiring prepayment reviews of power mobility devices in seven states. Experts say the delay was the product of many factors, and predicted that the the reprieve would be temporary.

“It’s coming,’’ said James Herren, a consultant and executive director of the Association for Tennessee Home Oxygen & Medical Equipment Services. “Be prepared.”

In fact, at press time, officials announced a new timetable and restructuring for the project. 

Herren, a former employee of a Durable Medical Equipment Medicare Administrative Contractor (DME MAC), said a key concern for Medicare was raised by contractors who would have been inundated with paperwork generated by the prepayment review demonstration. They lacked capacity to deal with the project—called “Round Zero” by some in the HME industry—and they told Medicare that it was a serious problem, he said.

Seth Johnson, vice president of government affairs for Pride Mobility Products Corp., was among HME advocates who fought the demonstration project, and he said Medicare appeared to be in disarray as the project advanced.

“I think there was a big disconnect within the agency,’’ he said. “I think what may have happened is a certain wing of the agency said they want to cut down on fraud and abuse, and said, ‘This is how we’re going to do it.’ The problem is they didn’t run it through the proper channels to make sure all the I’s were dotted and the T’s were crossed. … It just didn’t make sense. We’d have meetings with Medicare, and one official would say this is the way it’s going to work, and then you’d talk to somebody else, and they’d say, ‘Oh no, no.’ It would almost be the complete opposite. It appears the agency wasn’t prepared to announce the PMD demo when they did, and that caught up with them.”

Johnson noted other factors that contributed to Medicare’s decision to delay the project, including:

Unified opposition: “I really think that when the industry is unified and sticks together and is able to not only get providers actively involved but also various consumers who would be impacted—along with the clinicians and physician groups—that tends to be the right recipe for a successful effort. There was a lot of coordination between AAHomecare, NCART and the members of those organizations.”

Legal questions: “There was a legal question about whether Medicare had the authority to do this demonstration. Medicare doesn’t need Office of Management and Budget (OMB) approval to do prepayment review of individual companies. But when they do a general investigation of all companies in a specific state that are providing a specific type of medical equipment they have to follow the Paperwork Reduction Act process that requires approval from OMB to collect that information. Still, to this date, Medicare does not have an OMB clearance number to collect that information.”

Cash flow crisis: “Providers in the seven impacted states indicated that they wouldn’t be able to provide the product and services that they provided in the past if this demonstration moved forward due to the impact it would have on cash flow. For every chair that would have been going through the lengthy process, it would have added another 60 days potentially on to each claim submitted to Medicare.”

Now, Johnson said, the HME industry must be vigilant. “It is unclear how long the delay is going to be and whether CMS is just going to sit on their hands as they have in the past and wait for 60 days or 90 days and then roll out the demonstration without any significant changes. There’s a chance they could do that.”

He noted that Congress and stakeholders have encouraged CMS to develop a prior authorization process similar to the one included in legislation (HR 3399, section 204) introduced last year by Rep. Peter Roskam (R-Ill.). The legislation calls for a comprehensive face-to-face examination template for clinicians to document specific criteria to determine medical necessity. Stakeholders would be involved in the template-development process. “If done correctly, this would be in all stakeholders’ best interest, including Medicare,’’ he said.