Will CMS Fill the Gap?

Now that CMS has released the final set of new codes for power mobility devices, we are awaiting several additional pieces of information to gain a complete understanding of how the new power mobility benefit will impact beneficiaries and the industry. The new codes, along with new DMERC regional medical policy and new fees, are currently scheduled to be implemented Oct. 1, 2006.

The first additional document, which at press time was scheduled to be released by the end of June, is the SADMERC's Product Classification List, which will identify which manufacturers' products fit in which of the 64 new codes.

Next, scheduled to be issued late this month or early August, will be the DMERCs' new regional medical policy, which will give more specific coverage criteria for an understanding of when a beneficiary will quality for a particular category and code of product. Finally, CMS will issue new fees sometime before the implementation date. And that's the rub.

CMS uses the “gap-fill” method to develop fees whenever it issues new HCPCS codes (under the Six-Point Plan mandated by OBRA 1987). The agency developed this methodology as a way to approximate what an item's price would have been in 1986, the base year from which data was used to develop the original fee schedules under the Six-Point Plan.

CMS uses gap-filling to estimate what the price of a current piece of DME would be if it had been on the Medicare fee schedule in 1987. This 1987 estimated price is then trended forward to the present using the actual increases in fee schedule payments mandated by statute and regulations.

In its recent proposed rule implementing competitive bidding, CMS acknowledged the deficiencies with its gap-fill methodology and has proposed some general alternative methods to develop fees for new HCPCS codes. CMS still plans, however, to use gap-filling to develop fees for PMDs, despite the acknowledged fact that this methodology is seriously flawed and can result in Medicare payment amounts for power wheelchairs that are not realistic and equitable.

Under the methodology, Medicare payments for power wheelchairs could decrease by about 25 percent, with some models experiencing decreases greater than 30 percent.

However, a 2005 Muse & Associates survey of power wheelchair manufacturers commissioned by the American Association for Homecare indicated clearly that by using the Consumer Price Index for All Urban Consumers (CPI-U) for deflation to determine 1987 prices, CMS' gap-fill methodology overstates the actual price changes in power wheelchairs.