Proposed Rule on ‘Durable’ Definition Could Be Trouble

WASHINGTON — A proposed rule to redefine “durable” medical
equipment could mean more trouble for the industry, according to
attorneys with King & Spalding, who warn that it is “sweeping
in scope” and could reduce the number of DME products CMS
covers.

On July 1, the agency released a proposed rule that would require DME to have
“an expected
life of at least three years,” which on its face, seems
innocuous since DME is already generally expected to last for at
least five years. The new requirement would apply only to items
classified as DME after a final rule takes effect.

However, said Jeffrey S. Bucholtz, an attorney with King &
Spalding’s FDA and Life Sciences practice group, “I think the rule
could be quite problematic for home medical equipment
providers.”

In an alert issued to its clients, the law firm said the rule
“would establish a specific time component to the regulation that
has not existed in the past. Arguably, the prospective universe of
products that would meet the definition of ‘durable’ would narrow
significantly under CMS’ proposed rule.”

For some months, the law firm noted, CMS has been evaluating DME
categories to determine if they meet the definition of “durable.”
According to the alert, the agency “is using the proposed rule to
redefine the term ‘durable,’ presumably in an attempt to address
legal vulnerabilities arising from several Medicare contractor
determinations made earlier this year.”

The King & Spalding alert also pointed to other issues that
could adversely affect the HME community:

• Existing technology and DME that meet the agency’s old
  definition would presumably continue to be covered while virtually
  identical products classified as DME or approved/cleared by the
  Food and Drug Administration would be excluded.

• The proposed rule raises questions as to whether CMS will
  exclude additional devices as being non-durable prior to the final
  rule and whether it will overturn some of its recent DME decisions
  excluding from coverage certain devices deemed not to have long
  enough useful lives.

• CMS does not provide any details as to how it will handle
  products that evolve or improve their functionality.

“The proposed rule says it would be prospective only, but it’s
not clear how that would really work,” said Bucholtz. “For example,
if a manufacturer takes a covered product and makes modifications
to improve it, does that mean it has to go through a new coverage
determination under the new rules?”

Bucholtz said the proposed rule could be an attempt by CMS to
cut back on the number of products for which it reimburses HME
providers.

“CMS denies in the proposed rule that it is attempting to cut
back on DME coverage — it says it’s merely codifying the
standard it has been applying all along — but that’s not
persuasive,” Bucholtz said. “If that were really true, CMS probably
wouldn’t go to the trouble of promulgating a rule. In the real
world, it seems clear that this proposal is part of an effort to
cut back on coverage.”

The Center for Regulatory Effectiveness, a Washington watchdog
organization, also raised the question.

“Could CMS be undertaking rulemaking to try and exclude certain
types of DME from Medicare altogether?” the CRE asked in a post on
its website. “It’s not clear. Nor is it clear what the implications
would be for Medicare beneficiaries if any types of DME were
excluded.”

While the proposed rule does not “explicitly modify the coverage
rules for ‘attendant supplies’ that are necessary for the use of
DME,” according to the King & Spalding alert, it does raise
questions about devices that consist of both durable and
non-durable components and whether they would be covered by
Medicare.

The law firm said CMS has asked for comments on three specific
options:

• 1. Applying the three-year lifetime standard to the component(s)
  that perform the entire medically necessary function of the
  device;

• 2. Applying the three-year lifetime standard to the component(s)
  that perform a vital part of the medically necessary function of
  the device; and

• 3. Considering a device/system to be durable only if the cost of
  the durable component(s) over a period of time (for example, five
  years) makes up greater than 50 percent of the overall cost of the
  device/system over the same period.

CMS is taking comments on the proposed rule until Aug. 30 and
plans to issue a final rule Nov. 1.

Read the proposed rule.