AAHomecare to CMS: More PMD Pricing Corrections Needed

ALEXANDRIA, Va.–Despite CMS’ recent revisions, there are still
numerous problems with its new PMD pricing, the American
Association for Homecare said in a Nov. 20 letter to the
agency.

The association identified the following issues with the fee
schedule, which took effect along with new coding and coverage
criteria on Nov. 15:

–CMS’ methodology contains discrepancies. The agency excluded
250 of 443 models classified by the SADMERC from its computations.
Most of the excluded models are from major American manufacturers
Hoveround, Invacare, Pride Mobility and Sunrise Medical. In
contrast, the vast majority of models from major foreign
manufacturers Merits and Shoprider were included. Consequently, fee
schedule amounts are understated. “We believe the correct approach
would be to include all SADMERC-listed models in the computations,”
the letter stated.

–In some cases, the manufacturers suggested retail prices that
CMS used are much lower than the MSRPs that manufacturers submitted
to the SADMERC–four Hoveround models, for example, are understated
by as much as $970 to $1,320.

“We are also troubled by the adjustment to MSRPs for batteries,”
the letter said. “We understand that, while a number of
manufacturers excluded batteries from the base MSRPs they reported
to the SADMERC, CMS deducted the value of batteries for all
models.”

–CMS has not consistently reviewed the payment amounts for all
PMDs. While the agency has adjusted some pricing for devices in
Group 3, it has not for those in Group 2. For example, CMS priced
the K0825 Group 2 HD code only $3.50 above the K0823, while the
agency adjusted the K0851 Group 3 HD payment $547 higher than the
amount for K0849. “The agency’s seemingly inconsistent approach
further underscores the importance of the agency disclosing its
rationale for all MSRP adjustments,” AAHomecare wrote.

–Moreover, “CMS should use available historical data for
gap-filling, consistent with past practices.”

–CMS must address “numerous mathematical errors,” which have
resulted in pricing overall that is 3 percent lower than it should
be.

–While it appreciates the changes CMS has made in the fee
schedule for Group 3 PMDs, AAHomecare said “multi-power option
devices under Group 3 require further adjustment.” The association
recommended that CMS add the current allowable for E2320 to the
proposed allowable for the Group 3 multi-power codes.

The letter also asked CMS to explain what criteria it used to
determine which products were included and why that criteria was
used; to describe its reasoning in adjusting the reported MSRP for
some PMDs but not others; and why it made different adjustments to
the MSRP for different products.

“The lack of explicit information on CMS’ approach to developing
the fee schedules seriously limits our ability to evaluate the
impact of CMS’ action,” AAHomecare concluded.