Will New Grandfathering Provision Put Providers in a Bind?

BALTIMORE — In a move that could constrict provider
choice, CMS is proposing tightening up the grandfathering provision
for the new round of DMEPOS
competitive bidding, according to the 2010 physician fee schedule proposed rule published in
today’s Federal Register.

Tucked deep in the 1,128-page document, the provision revises
the definition of “grandfathered” items to include all rented items
within a product category.

“Under the old competitive bidding rule, if you were not a
contract supplier, i.e., a loser, you could make a decision on a
code-by-code basis on whether or not you would continue to provide
that product to the beneficiary under the new bid rate,” explained
Cara Bachenheimer, senior vice president of government relations
for Elyria, Ohio-based Invacare. “Under this [provision], your decision has
to be product category by product category.”

For example, under the proposed revision, providers who want to
be grandfathered in for walkers cannot pick and choose the walkers
to which they want to a grandfathered provider.

“If a supplier chooses to become a grandfathered supplier for
any item in a product category, it must agree to be a grandfathered
supplier for all items it is renting in that product category at
the time the competitive bidding program goes into effect, rather
than making separate grandfathering choices for each individual
[HCPCS] code,” the CMS proposal says.

Bachenheimer said it was tough to predict the effect of such a
change.

“I’m honestly not sure what impact that change will have …
it gives the supplier less flexibility in making those decisions,”
she said.

More worrisome to her, she said, is another aspect of the
proposal that calls for providers to notify beneficiaries three
separate times whether or not they intend to become grandfathered
suppliers.

Under the proposed revision, noncontract providers who choose to
employ the grandfathering provision must provide written
notification to CMS 30 business days before the start of the
competitive bidding program and must give written notice to
beneficiaries at the same time. If a beneficiary does not accept
the provider’s offer to be a grandfathered supplier, the proposed
rule says, the provider must provide two additional notifications
— 10 days prior and two days prior — to the beneficiary
before picking up the equipment.

Ten business days before picking up equipment, noncontract
providers who are not using the grandfather mechanism must notify
beneficiaries via a phone call. Then, two days prior to picking up
the equipment, providers must again notify the beneficiaries by
phone.

“The thing that strikes me as onerous is the notification
provision,” Bachenheimer said. “It seems unduly burdensome from the
supplier’s perspective that CMS is requiring three separate
notifications. You have to maintain documentation and confirmation
that the beneficiary has received [the notifications]. So, if
you’re a noncontract supplier and choose not to grandfather …
you are essentially saying that three times.”

Bachenheimer noted that HME stakeholders have the opportunity to
comment on the revision. See the full text of the proposed physician fee schedule rule
for instructions on comments, which will be accepted until Aug.
31.

“This is a proposed rule,” Bachenheimer pointed out. “If people
vehemently object, who knows? They may change it.”

View a fact sheet on the proposed grandfathering
provisions.