AAHomecare Studies Alternatives to Gap-Fill

Alexandria, Va.

The American Association for Homecare has commissioned the Washington-based research firm Muse & Associates for a study on alternatives to Medicare’s gap-fill pricing methodology for HME.

In addition to giving CMS a basis for developing alternative price-setting methods, in the longer term, the association said, the study will help to establish a more formal process to ensure that the home care community can share information with CMS about refinements to agency price-setting.

CMS has used the gap-fill method since 1989 to determine Medicare fees for DME when the historic data needed to calculate the fee schedules are not available.

For example, if price lists from 1986 to 1987 are not available and more current prices are used, the Medicare carriers are instructed to decrease the more current prices by a deflation factor to approximate the base-year price for gap-filling.

According to AAHomecare, the method presented problems last year in CMS’ calculations of new allowables for cushion codes.

The formula factors in deflation from the annual Consumer Price Index increase, but does not take into account the CPI freeze effected by the Balanced Budget Act of 1997. The method also assumes retail price increases each year. Due to technology advances and increased competition, many retail cushion prices have deflated in recent years.

The agency has since alleviated the problem by allowing providers to bill certain cushions under the miscellaneous category (K0108) until future code updates are released.

The association said that CMS is expected to use the current gap-filling method to calculate fees for the new power wheelchair codes announced last month — unless the agency adopts an alternative.

“As we saw last September with the seating and positioning changes, the existing gap-filling methodology created problems in the calculations of the new allowables,” said association President and CEO Kay Cox. “AAHomecare wants to propose an alternative for pricing the new power wheelchair codes to avoid the disruption to beneficiary access and care that will occur if the fee schedule amounts do not accurately represent the technology included in each code.”