by Cara C. Bachenheimer
September 15, 2015

With August recess behind them, Congress returns to Washington, D.C. this month with a full agenda. Our challenge will be to get key industry policy objectives addressed by Congress. There are two top legislative priorities—one impacts the complex rehab technology (CRT) community, and one impacts the entire home medical equipment (HME) community.

CRT Accessory Payment Issue

On July 27, Rep. Lee Zeldin (R-NY) introduced a bill—H.R. 3229—that addresses the Centers for Medicare and Medicaid Services’ (CMS) plan to apply competitive bid program pricing to complex rehab technology (CRT) wheelchair accessories effective January 1, 2016. The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) excluded CRT wheelchairs and accessories from the Medicare competitive bidding program. At the time, Congress could not have anticipated that CMS’s generalized HCPCS code system would enable the reduction of payment rates for complex wheelchair accessories that happen to share a HCPCS code with standard wheelchair counterparts. H.R. 3229 clarifies Congress’s intent that, in addition to MIPPA’s exclusion of complex wheelchairs from Medicare’s competitive bidding program, Medicare cannot use competitive bid program pricing to reduce payment levels for accessories used with complex wheelchairs.

In another show of Congressional support, in early August a bipartisan group of 23 Senators sent a letter to CMS stating:

“Congress specifically excluded complex rehabilitative power wheelchairs and related accessories from the Medicare DME competitive bidding program when it approved the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA 2008, Section 154). It is our view that applying competitive bidding pricing to complex rehabilitative wheelchair accessories is inconsistent with the intent of MIPPA 2008 and contrary to CMS policies regarding complex rehabilitation manual wheelchair accessories. A shift from the current fee schedule to bid program pricing could reduce access to complex rehabilitative wheelchairs and accessories for a small population of Medicare beneficiaries with
significant disabilities.”

The Senate letter echoed a similar letter sent to CMS in late April by 101 members of the House of Representatives. CMS responded to the House letter that it plans to proceed with the payment reduction for CRT accessories.

CMS first announced this payment policy in a December 2014 “Frequently Asked Questions” (FAQ) document stating that when it implements its authority to apply bid rates in non-bid areas starting in January 2016, it will apply bid rates to certain complex rehab accessories (such as seat/back cushions, recline/tilt systems or specialty controls) that have never been included in the Medicare DME bidding program. The December 2014 CMS FAQ followed CMS’s November 2014 final regulation (Medicare Program; End-Stage Renal Disease Prospective Payment System, Quality Incentive Program, and Durable Medical Equipment, Prosthetics, Orthotics and Supplies) implementing its authority to use information from the bidding program to adjust rates in non-bid areas starting January 2016.

There is another similar policy that CMS has not made clear related to its authority to apply information from the bid program to adjust prices in non-bid areas. The relevant portion of the law gives CMS the authority to use information from “competitive acquisition programs to adjust the payment amount for an area that is not a competitive acquisition area.” The law seems crystal clear that CMS may only use this authority to reduce payment rates in non-bid areas. However, in an email earlier this summer to the American Association for Homecare, a CMS official explained that CMS plans to reduce payment rates for medical items that are no longer priced under the bidding program, or for items that are in 10 or fewer bid programs, in all geographic areas, including competitive bid areas. This will affect about 150 HCPCS codes. Industry leaders are working to address these issues directly with CMS, as well as with Congress.

Relief from Payment Cuts in Non-Bid Areas

Earlier this summer, the industry obtained a commitment from House Budget Committee Chairman Tom Price (R-GA) to lead the legislative effort in the House to provide relief from the dramatic payment cuts scheduled to begin on January 1, 2016, with full implementation on July 1, 2016 in non-bid areas. The legislative proposal would minimize the payment cuts so the eventual payment rate would be a regional single payment amount (RSPA) plus 30 percent. The payment cut would be phased in during a period of four years. Additionally, the legislative proposal would maintain future bid ceilings at the current 2015 fee schedule amounts.

What can you do? Don’t sit idly by; instead pick up the phone, email and visit your local Representative and state Senators to educate them on the impact these payment policies have on your ability to provide items and services to Medicare beneficiaries.