CMS Proposes Three-Year Life for DME

BALTIMORE — CMS published a proposed rule in the July 8 Federal Register that would establish a three-year “minimum lifetime standard for items to meet the durability criterion for DME.”

In general, according to industry consultant Andrea Stark of Mira Vista, Columbia, S.C., DME is already expected to have a reasonable useful lifetime of at least five years.

“With the proposed rule,” Stark explained in a release, “CMS is taking it one step further by requiring that DME furnished under the Medicare program be able to withstand repeated use by a patient (or successive patients) for at least three years before requiring major repairs or replacement.”

Read the proposed rule.

CMS is accepting comments until Aug. 30 and said it will issue a final rule Nov. 1.

Stark’s full explanation of the proposal follows:

With the establishment of the Omnibus Budget Reconciliation Act of 1987 (OBRA ’87), durable medical equipment (DME) became broadly defined as equipment that meets all of the following criteria:

• a. Can withstand repeated use;
• b. Is primarily and customarily used to serve a medical purpose;
• c. Generally is not useful to a person in the absence of an illness or injury; and
• d. Is appropriate for use in the home.

Historically, specific product requirements, such as supply utilization or a product’s expected reasonable useful lifetime (RUL), have been crafted by CMS and/or the DME MACs on a go-forward basis, resulting in individualized national and local coverage determinations (LCDs). However, a proposed rule published by CMS on July 1, 2011 would revise the OBRA ’87 definition to require that new products seeking classification as DME have a minimum lifetime of three years.

In general, DME is already expected to have an RUL of at least five years. However, this guideline applies to how often Medicare will pay for replacement equipment based on the date of delivery — not the equipment’s age — and allows suppliers to swap out equipment as often as needed (albeit without payment). With the proposed rule, CMS is taking it one step further by requiring that DME furnished under the Medicare program be able to withstand repeated use by a patient (or successive patients) for at least three years before requiring major repairs or replacement.

It is important to note that the minimum lifetime requirement does not replace the current RUL standard. Equipment replaced prior to five years from the date of delivery, regardless of age, will still remain ineligible for payment, with the exception of certain replacements due to loss, theft, irreparable damage, or a break in need of greater than 60 days.

The new definition would only apply to prospective equipment seeking classification as DME, and not to equipment already classified as DME under the Medicare program. It would also not apply to DME supplies or accessories. So those products you are currently providing to your Medicare patients will remain unaffected.

However, products and product models that have not yet been approved by Medicare, where the manufacturer is actively seeking Medicare coverage under a particular HCPCS, will be affected. In situations where a portion, but not all, of a product may be considered durable (i.e. a new form of back brace), CMS will make benefit determinations on a case-by-case basis.