HCFA Plans Competitive Bidding Demonstration Project
March 2, 2000
The Health Care Financing Administration (HCFA) has plans to implement a durable medical equipment and prosthetic and orthotic supplies (DMEPOS) demonstration project beginning in January 2001. The standards, requirements, and items to be included as part of the demonstration project are listed on HCFA’s Web site. The site also includes all the appropriate forms.The project is important to respiratory therapists because nebulizer drugs and home oxygen therapy will be among the DMEPOS items included. HCFA is accepting comments on the project until March 17, 2000. Please direct your comments to: Cheryl West by e-mail at west@aarc.org.
AARC Is 'On the Record' for Oxygen Service and Assessment Requirements
November 18, 1999
On October 5, 1999, the AARC participated in the Second Competitive Bidding Demonstration, held at the Health Care Financing Administration headquarters. The AARC was represented by Cheryl West, MHA, Director of Government Affairs, who voiced the recommendations of the AARC. These recommendations are included in the recently released minutes of the "Public Meeting to Discuss the Conduct of a Second Competitive Bidding Demonstration."West, through a letter from Dianne Kimball, RRT, President of AARC, emphasized that the competitive bid requirements for suppliers should include a service standard for home oxygen and suggested that the standard provide for follow-up service visits by credentialed or state licensed respiratory therapists. It is becoming more difficult for oxygen suppliers to continue to provide clinical support when they are receiving decreasing reimbursements. The lack of established service standards by HCFA may allow winning bidders to simply compete on price and eliminate that which is not required.
Patrick Dunne, MEd, RRT, FAARC, Chair of the Blue Ribbon Panel, represented the AARC during the original competitive bidding National Technical Experts Panel and had also recommended that the demonstration include a service standard. Then, the AARC recommended that the Clinical Practice Guideline (CPG) for the provision of home oxygen therapy be used to devise criteria for evaluating suppliers after bids are submitted for home oxygen therapy.
OIG Recommends Better Documentation for Home Oxygen
September 24, 1999
In a recent study of Certificates of Medical Necessity (CMNs), the Office of Inspector General (OIG) found that supplier's documentation for home oxygen was lacking. The report says that Medicare paid $236 million in 1996 for claims for oxygen equipment that had inaccurate or incomplete CMNs. The OIG also found that 23% of CMNs were incomplete or lacked confirming laboratory reports or justification for portable home oxygen equipment. In some cases, the suppliers were unable to document services they claimed they had provided. An estimated $9.7 million was paid for 13% of Medicare beneficiaries who reported that they never used their portable systems.The OIG, therefore, recommended that Health Care Financing Administration (HCFA) act to:
- Ensure system edits can identify incomplete CMNs and delay payments for oxygen equipment requests with incomplete CMNs.
- Conduct periodic checks to determine whether CMNs are signed by the beneficiaries' physicians and whether the suppliers' files match the electronic CMN submitted to the carrier.
- Focus on oxygen equipment claims during medical review.
- Establish specific standards for home oxygen equipment suppliers as set forth in the Balanced Budget Act of 1997.
- Alert physicians to their responsibilities in determining medical necessity and use of equipment covered under the Medicare program.
The OIG reports that HCFA has agreed with these recommendations.
August 12, 1999
A competitive bidding demonstration for durable medical equipment in
Polk County FL will reap savings of between 13 percent and 31 percent
for Medicare depending on product category, HCFA has announced. HCFA has
set new payment rates for the pilot project based on 73 bids submitted
by 30 companies. The new rates will be 13 percent lower than the
Medicare fee schedule for surgical dressings, 18 percent lower for
oxygen-related supplies, 20 percent lower for urological supplies, 30
percent lower for hospital beds and accessories, and 31 percent lower
for enteral nutrition products, the agency says.
HCFA will contract with the four to 12 companies that were successful bidders in each category. Beginning Oct. 1, Medicare will pay 80 percent of the new prices, and suppliers in the pilot must agree to charge beneficiaries no more than the remaining 20 percent. Prices will remain in effect for two years.
The significantly reduced prices obtained in the bidding process "show that competition can work for Medicare beneficiaries," HCFA Administrator Nancy-Ann DeParle said in a statement.
--Source, Medicine & Health
July 14, 1999
The Health Care Financing Administration (HCFA) issued its policy on noninvasive positive pressure ventilation on June 1, 1999, with several changes that are in conflict with current clinical practice and legal uses of NPPV. The policy will become effective October 1, 1999.
The AARC responded with comments to HCFA before the June 15 deadline and presented these comments at the HCFA town hall meeting on June 25.
But, we must do more work! The AARC is asking that all members write letters to their Congressional representatives. For your convenience we have developed a writing guide with a complete list of pertinent points and background information on this NPPV policy.
Please take a moment to respond right away. Also, encourage your colleagues and others who would be affected by this issue to write Congress -- your letters are needed immediately!
June 24, 1999
The US Department of Health and Human Services' Office of the Inspector General has issued compliance guidance for providers of medical equipment and supplies to help them avoid breaking Medicare fraud and abuse laws. The document is the latest in a series of compliance suggestions from the agency for healthcare providers.
In answer to ongoing concern about fraud and abuse in Medicare, the federal government has recently devoted increased resources to flushing out provider offenses. Earlier this month the Inspector General released compliance guidance to health plans participating in Medicare, and has released guidance in recent months for clinical laboratories, hospitals, home health agencies and third-party medical billing companies.
Unlike earlier guidance, the "Office of Inspector General's Compliance Program Guidance for the Durable Medical Equipment, Prosthetics, Orthotics and Supply Industry" includes recommendations as to how small suppliers with limited resources can implement controls to reduce the risk of illegal or improper conduct.
Although the guidance is voluntary, the Office of the Inspector General has said that the existence of an effective compliance program could mitigate actions taken against suppliers involved in alleged wrongdoing. Complete information, slated to appear in the Federal Register next week, offers guidance on policies, procedures and standards of conduct, designation of a compliance officer and committee, development of training and education programs, creation of hotlines for complaints, performance of internal audits to monitor compliance, enforcement of disciplinary directives, and prompt response to offenses.
In the new publication, the Inspector General cautions suppliers against 47 compliance risks, including making unsolicited telephone calls to Medicare beneficiaries, continuing to bill for rental items after they are no longer medically necessary, and providing and/or billing for substantially excessive amounts of durable medical equipment, prosthetics, orthotics and supplies.
The Inspector General also warns suppliers against improper conduct relevant to completing certificates of medical necessity, and against engaging in business arrangements that violate federal and state laws or regulations prohibiting the exchange of something of value for Medicare patient referrals.
The Guidelines are available on the HHS Office of Inspector General's Web site at http://www.hhs.gov/oig/modcomp/cpgfinl.htm.
June 16, 1999
The AARC and other organizations continue working to bring about change to Healthcare Financing Administration's (HCFA's) draft coverage policy on noninvasive positive pressure ventilation (NPPV).
HCFA issued a revised policy on May 28, 1999, which incorporates some, but not all, of the changes the AARC requested in their initial comments last year. The coverage policy issue concerns reimbursement policies for NPPV issued by the durable medical equipment regional carriers (DMERCs). For reimbursement purposes, the DMERCs are considering moving NPPV ventilators from the current "frequent and substantial service" category to a capped rental category.
The AARC has two opportunities to make an impact: 1) we filed additional comments before the June 15 deadline and 2) we are attempting to get a speaker on the agenda for a HCFA town hall meeting on this issue scheduled for June 25.
We need your help in two specific areas.
HCFA wants to know what services are provided to NPPV therapy patients by clinicians caring for them in their homes. Please provide us with information we can use in this regard.
Send to Kris Williams at the AARC by mail (11030 Ables Lane, Dallas, TX 75229) fax (972/484-2720) or email (williams@aarc.org).
April 8, 1999
Because of the severe fee schedule reductions, the BBA requires a study be made of issues relating to home oxygen equipment, and the Health Care Financing Administration (HCFA) has called for comments on whether or not the study is necessary. The AARC has sent our recommendation to HCFA that the study move forward immediately.
As you know, the Balanced Budget Act (BBA) of 1997 called for dramatic reductions to home oxygen reimbursements -- January of this year brought the final cut to 30%. Now HCFA is considering investigating the effect those cuts have made on patients.
The March 3 issue of the Federal Register contained HCFA's proposal for the study. The study's primary objectives would be: to evaluate any changes in access to, and quality of, home oxygen equipment provided to Medicare beneficiaries as a result of the fee schedule reduction; and to describe current physician practices in ordering and prescribing home oxygen services.
Before the agency will undertake the proposed study, it must receive adequate input supporting the need for its implementation. Please follow our example and let HCFA know this study is indeed necessary in order to assure that Medicare patients are receiving the appropriate care.
March 12, 1999
AARC member Scott Bartow has recently been elected chairman of the Joint Commission on Accreditation of Healthcare Organizations' (JCAHO) Professional Technical Advisory Committee (PTAC) [Homecare Accreditation Program]. Bartow previously served two years as AARC's representative to this PTAC and one year as vice chairman of the committee. Bartow expects his chair year will provide an opportunity to make an even greater impact for respiratory therapy on other healthcare professions.
The JCAHO established the PTACs so they could obtain timely/accurate feedback from the healthcare industry. This is a critical distinction from government regulatory bodies. "The value of the PTACs," says Bartow, "stems from the diversity of the organizational perspectives and the discussion and debate which occur at the meetings." He further explained that "members are expected to be proponents of their respective body of knowledge to the Joint Commission, and proponents of the Joint Commission to their constituents, providers, and/or consumers."
Bartow describes the PTACs as "an integral part of the Joint Commission's advisory structure" explaining that PTAC members actually assist JCAHO in the development and refinement of standards and scoring guidelines for accreditation. The JCAHO website provides a good overview of the home care standards development process.
As chair for the Homecare PTAC, Bartow will facilitate committee actions as they help write and review JCAHO's home care accreditation standards. The committee will be challenged by the Commission's plans to begin using "core" standards and measurements in the year 2001. These core, performance-based standards and measurements will transcend all individual accreditation programs, according to Bartow. "This means that [the home care PTAC's] input will play an important role in all accreditation programs." He will also be in touch with the Standards and Survey Procedures Committee and participate in the Board of Commissioners meetings, both of which have broad responsibilities for all accreditation programs. Bartow says this will allow him the opportunity to contribute to discussions on behalf of respiratory therapy as well as to get a "heads up" on information that may be pertinent to the respiratory profession.
Bartow says that as chair he will also have more opportunities to interact and make alliances with other professional organizations. For example, as chair he will attend and participate in the Board of Commissioners Meetings. "It is my hope that through this contact, other health care organizations [and] individuals will learn more about the value of respiratory therapy and our overall contribution to the health care field," Bartow said.
It is important to note that seats on any one of JCAHO's PTACs are coveted among health care organizations. And because competition for seats on these committees runs very high, they simply cannot be given to every group that requests them. "The JCAHO could not facilitate all requests for seats without seriously compromising the efficacy of the committee, " states Bartow. "The AARC is fortunate to have a seat on the home care committee. Our presence and participation creates a critical link to the largest healthcare accreditation body in the country."
August 20, 1998
The durable medical equipment regional carriers (DMERCs) have issued the draft of their policy for coverage of non-invasive positive pressure ventilation (NPPV) therapy and it falls short of AARC expectations.
In February, at HCFA's request, the National Association for Medical Direction of Respiratory Care held a consensus conference in Washington. The AARC and other groups gathered to develop guidelines and appropriate clinical indicators for NPPV therapy. However, the DMERC policy differs significantly from the recommendations produced by the February meeting. If left unchanged, the policy would significantly affect a Medicare beneficiary's ability to receive NPPV therapy.
The AARC is in the process of developing extensive comments to the draft policy. We will post those comments in their entirety as soon as they are finalized.
August 1998
The AARC recently sent a representative to the Health Care Financing Administration (HCFA) technical advisory committee to provide comments on the agency's plan to implement competitive bidding for home medical equipment suppliers (HMEs). The AARC focused on assuring that the services or scope of work provided in any bid package must include professional services as a quality assurance measure.
HCFA believes current prices Medicare is paying are too high, so the agency sees competitive bidding as a way to create a reduction in reimbursements and thus save money for the beneficiaries and the program. HCFA has been slowly moving toward implementing a limited competitive bidding demonstration project for the last two years, and the technical advisory committee represents their efforts to actually draft the details of the project.
The agency has been holding "bidder conferences" throughout the fall of 1998, and HCFA anticipates the demo will be up and running by April 1999. In the meantime, there are still many unanswered questions concerning this new approach to HME services. The AARC, as a member of the Part B Coalition, has signed on to the following letter requesting answers to those questions prior to implementation of the competitive bidding project.
Lu Zawistowich, Director
Program Development and Information Group
Health Care Financing Administration
7500 Security Boulevard
Baltimore, MD 21244
RE: Medicare DMEPOS Competitive Bidding Demonstration
Dear Ms. Zawistowich,
At the September 22, l997 meeting of the Technical Expert Panel (TEP), the Health Care Financing Administration (HCFA), Palmetto Government Benefits Administrator (GBA) and Abt Associates presented a proposed design for the Medicare DMEPOS Competitive Bidding Demonstration. Subsequent to the TEP meeting, participants submitted numerous comments and questions to Palmetto GBA.
Given that neither HCFA nor Palmetto GBA have responded to these questions, several critical issues remain unresolved related to the operation and implementation of the demonstration. These include the following:
DesignThank you for your assistance in responding. We look forward to working with you and HCFA in developing truly effective means to ensure integrity and efficiency in furnishing DMEPOS items and services to meet the medical needs of Medicare beneficiaries.
cc: Herb Silverman, HCFA
Jeff Hinson, HCFA
Elaine Myers, Palmetto GBA
January 15, 1998
HCFA has begun to issue the regulations that implement the provisions of last yearÕs Balanced Budget Act (BBA). On January 7, 1998 HCFA issued final regulations implementing the agencyÕs expanded authority to reduce (or increase) payments for items or services under the Part B Medicare Program. With the exception of physician services, all Part-B provider services are subject to what is termed Inherent Reasonableness (IR) authority. Under BBA, Congress now permits HCFA, on a national level and/or Medicare carriers on a local level, the authority to raise or lower payments 15% or less, every year, if it is deemed by the agency or the carrier that current payments for items or services are excessively high or low (do not expect HCFA to use IR to raise payments). HCFA or the local carrier need meet only general criteria to invoke IR and reduce payments by up to 15%. The regulation clearly states that the new IR authority permits the reducing of payments for items or services could occur more than one time. The example given in the regulation is--if it is determined that an item is excessively over priced by 25%, then under the regulations the Medicare payment could be reduced by 15% in the first year and an additional 10% in the second year. These rates will go into effect March 9, 1998.
The Balanced Budget Act of 1997 (BBA) reduced Medicare payments by $115 billion over the next five years. No Medicare provider has been left unbloodied. In spite of the intense lobbying efforts from industry and beneficiary groups, the HME suppliers have taken the following cuts:
HCFA has not made issuing regulations for a three-tiered pricing a priority. These regulations may be issued in late winter 1998. The secretary of HHS currently has the authority to develop different categories of pricing for the different classes of oxygen (i.e. liquid, gas and concentrators).
The secretary of HHS also has the authority to set service standards for O2 suppliers.
The BBA provided some relatively positive news for HME:
Short term -- HME can offer patient equipment upgrades with patients paying the difference between what is reimbursed by Medicare and DME pricing. This will be closely monitored to insure no undue pressure is put on beneficiaries to upgrade against their will. Again, regulations must first be issued.
Long term -- two studies are required: