CMS Proposes Exam, Drug Pricing Regs

In the Aug. 5 Federal Register, the Centers for Medicare and Medicaid Services (CMS) announced its proposed implementation of two HME provisions of last year's Medicare Modernization Act (MMA). Part of a larger proposed regulation primarily affecting physician services, the provisions propose (1) a requirement of a face-to-face examination by the ordering physician before prescribing power wheelchairs and other items, and (2) payment methodology changes for 2005 based on average sales price (ASP) for inhalation drugs.

Face-to-Face Exams

The law requires CMS to establish types of covered DME that should require a prescription and face-to-face exam from a physician or practitioner, and to apply this requirement to motorized wheelchairs as of Dec. 8 last year.

The law also gives CMS authority to add items to the requirement. And CMS did just that, proposing a face-to-face examination by a physician, physician assistant, clinical nurse specialist or nurse practitioner — independent from the equipment supplier — to determine the medical necessity for all durable medical equipment, prosthetics, orthotics and supplies (DMEPOS). The exam should be sufficient to evaluate and treat the patient's medical condition — and not be just for the sole purpose of obtaining an order.

The proposed rule requires an order prior to delivery for all DMEPOS, dated and signed within 30 days after the exam. The order must include verification of the examination, and CMS is soliciting comments on the appropriate verification process. The prescribing physician or practitioner must also maintain appropriate and timely documentation in the medical records that support the need for all DMEPOS ordered.

The proposal also states that CMS would promulgate through contractor instructions other criteria required for payment, such as for prescription renewal requirements, repair, minor revisions and replacement. The agency is seeking comments on whether it should establish national renewal requirements or permit contractor discretion.

Inhalation Drug Pricing

CMS anticipates that the first-quarter 2005 Medicare payment at ASP plus 6 percent is estimated to be $0.04 per milligram for albuterol sulfate and $0.30 per milligram for ipratropium bromide. CMS states, “While these figures represent estimated reductions from 2004 payment levels of about 90 percent, they are not necessarily the actual payment amounts for the first quarter of 2005. The actual payment amounts will be based on ASPs calculated from the manufacturer ASP to be submitted for the third quarter of 2004.”