ALEXANDRIA, Va.--The American Association for Homecare has commissioned the Washington-based research firm Muse & Associates for a study on alternatives to Medicare's gap-fill pricing methodology for HME.

In addition to giving the Centers for Medicare and Medicaid Services a basis for developing alternative price-setting methods, in the longer term, the association said, the study will help to establish a more formal process to ensure that the home care community can share information with CMS about refinements to the new price-setting methodology.

CMS has used the gap-fill method since 1989 to determine Medicare fees for DME when the historic data needed to calculate the fee schedules are not available. For example, if price lists from 1986 to 1987 are not available and more current prices are used, the Medicare carriers are instructed to decrease the more current prices by a deflation factor to approximate the base-year price for gap-filling. The deflation factors are based on the percentage change in the Consumer Price Index (CPI) for all urban consumers.

According to AAHomecare, the method presented problems last year in CMS' calculations of new allowables for cushion codes. The agency has since alleviated the problem by allowing providers to bill certain cushions under the miscellaneous category until future code updates are released.

The association said that CMS is expected to use the current gap-filling method to calculate fees for the new power wheelchair codes announced earlier this month--unless the agency adopts an alternative. "As we saw last September with the seating and positioning changes, the existing gap-filling methodology created problems in the calculations of the new allowables," said association President and CEO Kay Cox. "AAHomecare wants to propose an alternative for pricing the new power wheelchair codes to avoid the disruption to beneficiary access and care that will occur if the fee schedule amounts do not accurately represent the technology included in each code.

"The benefits of this study on gap-filling methodology will go beyond power wheelchair codes. Repairing the flawed nature of gap-filling will benefit every new technology that is introduced to the marketplace," Cox said.

Last year, AAHomecare commissioned Muse & Associates to conduct a study on dispensing fees to compensate for drastic Medicare reimbursement reductions in respiratory medications. According to CMS, that study was ultimately used as a basis for the drug-dispensing fee now in effect.

For more on CMS' cushion codes, visit the Nov. 1, 2004, HomeCare Monday, available by clicking here. For more information on the new power wheelchair codes, visit CMS' DMEPOS homepage at www.cms.hhs.gov/suppliers/dmepos.

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