CMS Proposes Exam, Drug Pricing Regs

In the Aug. 5 Federal Register, the Centers for Medicare and Medicaid Services (CMS) announced its proposed implementation of two HME provisions of last year’s Medicare Modernization Act (MMA). Part of a larger proposed regulation primarily affecting physician services, the provisions propose (1) a requirement of a face-to-face examination by the ordering physician before prescribing power wheelchairs and other items, and (2) payment methodology changes for 2005 based on average sales price (ASP) for inhalation drugs.

Face-to-Face Exams

The law requires CMS to establish types of covered DME that should require a prescription and face-to-face exam from a physician or practitioner, and to apply this requirement to motorized wheelchairs as of Dec. 8 last year.

The law also gives CMS authority to add items to the requirement. And CMS did just that, proposing a face-to-face examination by a physician, physician assistant, clinical nurse specialist or nurse practitioner — independent from the equipment supplier — to determine the medical necessity for all durable medical equipment, prosthetics, orthotics and supplies (DMEPOS). The exam should be sufficient to evaluate and treat the patient’s medical condition — and not be just for the sole purpose of obtaining an order.

The proposed rule requires an order prior to delivery for all DMEPOS, dated and signed within 30 days after the exam. The order must include verification of the examination, and CMS is soliciting comments on the appropriate verification process. The prescribing physician or practitioner must also maintain appropriate and timely documentation in the medical records that support the need for all DMEPOS ordered.

The proposal also states that CMS would promulgate through contractor instructions other criteria required for payment, such as for prescription renewal requirements, repair, minor revisions and replacement. The agency is seeking comments on whether it should establish national renewal requirements or permit contractor discretion.

Inhalation Drug Pricing

CMS anticipates that the first-quarter 2005 Medicare payment at ASP plus 6 percent is estimated to be $0.04 per milligram for albuterol sulfate and $0.30 per milligram for ipratropium bromide. CMS states, “While these figures represent estimated reductions from 2004 payment levels of about 90 percent, they are not necessarily the actual payment amounts for the first quarter of 2005. The actual payment amounts will be based on ASPs calculated from the manufacturer ASP to be submitted for the third quarter of 2004.”

CMS is proposing a separate dispensing fee for inhalation drugs and is seeking specific comments about an appropriate dispensing fee to cover “shipping, handling, compounding and other pharmacy activities required to get these inhalation medications to Medicare beneficiaries.”

The proposal also allows physicians to prescribe and for a pharmacy to fill an inhalation drug order covering 90 days (the current limit is a month’s supply), and eliminates the requirement that beneficiaries assign claims to suppliers in situations where suppliers are already required to accept assignment. This would eliminate the need for suppliers to obtain a signed Assignment of Benefits form from a beneficiary.

Let the Dialog Begin

Comments on the proposals are due Sept. 24, with CMS planning to issue a final regulation by the end of the year. Many comments should be forthcoming. CMS realizes there are service costs associated with inhalation drugs, and seeks comment on a verification process for face-to-face exams.

The agency has thrown the ball in our court. So, let the dialog begin.

To view CMS’ proposed regulation and information on where to send comments, visit www.cms.gov/physicians.

A specialist in health care legislation, regulations and government relations, Cara C. Bachenheimer is vice president, government relations, for Invacare Corp., Elyria, Ohio. Bachenheimer previously worked at the law firm of Epstein, Becker & Green in Washington, D.C., and at the American Association for Homecare and the Health Industry Distributors Association. You can reach her by phone at 440/329-6226 or by e-mail at [email protected].