Potential Ventilator Changes and Competitive Bidding

Updated December 6, 2018: The Council for Respiratory Care (CQRC), a coalition of the nation’s leading home oxygen therapy providers and manufacturing companies, reiterated support for the Centers for Medicare & Medicaid Services’ key reforms to stabilize the market for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) including home respiratory therapy and supplies, but expressed concern over a sub-regulatory proposal to include home ventilators in the Competitive Bidding Program (CBP).

In a letter to CMS Administrator Seema Verma, the CQRC praised CMS for reforming the CBP so the price of DMEPOS is determined using a lead-item pricing methodology, rather than the flawed median bid methodology, which caused half of all providers to accept reimbursement rates below their maximum bids. However, the letter expressed serious reservations about the inclusion of home ventilators in the CBP because of concern about whether the new program would be interpreted to incorporate home ventilators, which are used by the most fragile home respiratory beneficiaries. 

“The CQRC is deeply troubled and confused by the proposal to add three types of ventilation devices, which are used by highly vulnerable Medicare beneficiaries who otherwise could not remain in their homes, to the competitive bidding program before the modified policies have been implemented,” CQRC’s letter states.

Unfortunately, the inclusion of home ventilators in the CBP could impede patient access to these lifesaving therapies by requiring these patients to rely upon the lowest bidders before the new methodology has been tested. As CMS starts to implement reforms that make it more likely for home oxygen supplies and equipment to reflect true market pricing, it is unclear how the updated CBP methodology will address unresolved issues, such as capacity, how information will be used to set rates, and the relationship between lead items and non-lead items in each product category.

Moreover, researchers have argued that one of the rationales for subjecting home ventilators to competitive bidding—concerns about overutilization—is largely unfounded as the recent rise in usage is owed far more to technological and clinical advancements than fraudulent overutilization, according tothe CQRC.

Time is running out for submitting comments related to including certain ventilator classes (HCPCS codes E0465, E0466 and E0467) in the next round of the CBP, as well as adding several knee and back brace HCPCS codes. AAHomecare has asked providers to share their feedback with the CMS.

Ventilators are covered for the treatment of conditions associated with neuromuscular diseases, thoracic restrictive diseases and chronic respiratory failure consequent to chronic obstructive pulmonary disease.

“Including these products in the bidding program is guaranteed to reduce the number of companies with the experience and clinical expertise needed to serve this vulnerable patient cohort,” said Tom Vorhees, CEO of PromptCare, a respiratory and infusion therapy provider serving both adult and pediatric ventilator patients throughout the Mid-Atlantic and Northeast regions. “If CMS’s decision to include ventilators in competitive bidding results in a lack of access to these critically important products, the impacts on Medicare and Medicaid beneficiaries and their caregivers will be devastating.”

Ventilators, shared AAHomecare, are highly specialized and care-intensive products. In March comments to MedPAC, the advocacy group said, “These patients are fragile and the therapy requires intense amounts of training and monitoring. During initial phases of home therapy, patients require careful assessment, ongoing monitoring and titration of their equipment. Patients who use noninvasive positive pressure support ventilators also require consistent follow-up, typically by respiratory care personnel.”

Recently, the Food & Drug Administration (FDA) cleared a new type of ventilator that integrates multiple therapies into a single device for ventilator-dependent patients. This new multifunction ventilator can also function as an oxygen concentrator, cough stimulator, aspirator and nebulizer. The multifunction ventilator replaces the multiple stand-alone devices (for example, a separate ventilator, oxygen concentrator and so forth) that beneficiaries may need over time. 

Ventilator technology has evolved so that it is possible for a single device to treat numerous conditions by operating in several different modes, such as basic continuous positive airway pressure (CPAP) mode, respiratory assist device (RAD) mode and traditional ventilator mode. The Office of the Inspector General has, in the past, viewed this as an opportunity for abuse whereby suppliers could bill Medicare for a device as if it were being used as a ventilator, when use of a lower cost CPAP device or RAD is indicated based on the patient’s medical condition.

The OIG focused on the noninvasive pressure support ventilator as vulnerable to inappropriate billing. An invasive ventilator, in contrast, requires the beneficiary to have a tracheostomy tube, which would likely discourage the innapropriate use of such a ventilator in place of other devices. 

Medicare makes monthly rental payments for this category of DME as long as medical necessity and Part B coverage remain. The monthly rental payment covers the base device (i.e., the ventilator); frequent and substantial servicing of the device; and replacement of essential accessories (e.g., tubing, masks, and filters). 

Beginning in 2016, CMS changed the way it paid for ventilators by collapsing five ventilator HCPCS codes into two codes. CMS implemented a special payment rule November 21, 2018, related to HCPCS E0467, a newly added code for a multifunction ventilator system, effective January 1, 2019. 

Furthermore, adding ventilators to the competitive bidding program could also create problems under the lead item pricing model issued in the ERSD/DMEPOS final rule, if ventilators were to be placed with portable oxygen concentrators.

In a recent interview with HomeCare, Cara Bachenheimer of Brown & Fortunato said, “Lead item pricing makes the most sense when you have like items in a discreet product category. One example is separating oxygen and CPAP, and having two separate product categories for that, because you have products that are much more rationally related to each other…The product category decisions are not final or part of the regulations. It’s going to be an important policy decision that CMS comes out with.”

Comments on the proposal are due by December 17, via [email protected]. AAHomecare has developed a messaging document to help providers formulate comments and is also asking CMS to provide more specific coverage criteria for ventilators.

See the full list of proposed HCPCS codes here.

Visit aahomecare.org for more information.