Ask providers and manufacturers working in the mobility sector of the home medical equipment industry what it's like these days and you'll hear words such as “challenging,” “uneasy,” “chaotic” and “confusing.” Indeed, it is all those things.
In the past year, the power mobility market has been faced with a continuing and stepped-up fraud investigation by CMS; a new National Coverage Determination for mobility; the issuance, then the delay, of an Interim Final Rule; and new power mobility codes that were released last February, revised months later with the addition of more — then withdrawn entirely and are now being reworked.
President Bush added a new worry to the list with a proposal in his FY 2007 budget that would eliminate the first-month purchase option for power wheelchairs. And a Valentine's Day fact sheet from CMS asked physicians and other providers to hold off on submitting some PWC claims until April 1.
“With all the changes hitting this industry, it's amazing that anyone can keep up with it all,” says Jerry Keiderling, vice president of VGM's U.S. Rehab in Waterloo, Iowa.
Such fast-flying changes have thrust the power mobility sector into the greatest state of flux it's ever been in, stakeholders say. But perhaps the real question isn't where this sector of the marketplace has been or where it is — but where it's going.
TURNING POINT
From Dan Meuser's vantage point, the industry is at a crossroad. The president of Exeter, Pa.-based Pride USA says there are two paths the industry could choose — but only one will lead to success.
“The undesirable road is dark, full of potholes and bears no directional signage. This direction will reduce quality of care, quality of products and a reasonably consistent process,” Meuser predicts.
“Here, reimbursement levels and utilization will be controlled by ‘technical denials’, ‘gotcha’ audits (that may often come as a big surprise to the unsuspecting reputable provider), and untenable fee schedule cuts. Fraud will randomly rear its ugly head for the media's pleasure, and the exceeding displeasure of the professionals of our industry and CMS.”
But as with every crossroad, there is another path.
“The other direction,” says Meuser, “can lead to an environment of a higher quality of care, higher business standards, improved client satisfaction and a reasonably consistent industry climate — consistent for providers, physicians, the DMERCs … and for beneficiaries' access to [power mobility devices].”
Indeed, says Meuser, the latter road can move the industry forward as part of a unified health care team.
“This road can make the provider, physician, rehab professional and funding source all part of the same clinical team, each consistently doing their part to provide quality care to only those in need,” Meuser says. “This road clarifies the responsibilities of each PMD clinical team member and will lead to a justifiable, cost-efficient, quality PMD delivery and service system.
“This system does require increased regulations,” he continues, “but these measures will, among other intentionally designed outcomes, minimize unintentional weak compliance standards and significantly help extinguish criminally intended fraud, which is a must for our good industry.
“This route is our only option. And, because of all the good our industry is about and all the good that comes from our work, this route is worth fighting for.”
Many in HME would agree with him. Now, they say, is the time not only to fight the good fight but also to be optimistic about the future.
“We believe the mobility market is the worst it is ever going to be,” states Calvin Cole, director of corporate development and governmental affairs for Hoveround, Sarasota, Fla. “It's only going to get better.”
“It doesn't seem it could get much worse,” adds Karl Ylonen, certified rehabilitation technology supplier with Care Medical of Vancouver, Wash. “I think the next two to three years are going to be very problematic and challenging. But I think the direction we're going in is good.”
A MAJOR ROADBLOCK
As Ylonen notes, the road ahead is paved with challenges for the mobility sector.
“The biggest immediate challenge is the 2006 Medicare codes and related pricing,” says Don Clayback, senior vice president-networks for Lubbock, Texas-based buying organization The Med Group. “This has very wide implications.”
In fact, stakeholders say, everything from beneficiary access to the design and manufacture of new products either is, or has the potential to be, affected by Medicare's new power mobility codes.
Rita Hostak, vice president of government relations for Sunrise Medical, Longmont, Colo., says that the codes will “lay the groundwork for the development of the Local Coverage Determination” for PMDs.
And that could affect beneficiary accessibility.
To ensure that those who need PMDs get them, the codes must truly describe the technology, points out Cara Bachenheimer, vice president of government relations for Elyria, Ohio-based Invacare. And, she notes, “national, local and medical policies that describe the consumer's condition and needs must match those HCPCS codes.”
But it isn't just the issue of how the codes are written that has industry players concerned. How they will be priced is also in question. CMS currently uses what is called the “gap-filling” method to determine allowables for new codes. (See “Industry: Gap-Fill Just Won't Work” on page 16.)
“The methodology that CMS uses to develop the fee schedule is inherently flawed when applied to power mobility products,” says Hostak, adding that “inadequate reimbursement will result in access problems and will challenge suppliers, especially those with high costs related to the important services provided.”
Once the new codes do come out, it is likely that new products will follow. “We've got manufacturers holding products, I understand, because they don't want to release them and then have to redo them when the new coding comes out,” says Ylonen.
That is largely true, according to Cole. “Manufacturers have problems building product without knowing what the coding is,” he says. “You can't design things that aren't going to be paid for. We're all kind of sitting on our hands until we know what the coding is going to be.”
But he adds, “once we get the pricing and the coding out of the way, I think we will be out of the dark forest for a change.”
Other providers are not so sure.
The pending re-issue of the IFR and its implications are one huge matter. Its initial implementation in October already had created confusion regarding claims documentation. Its subsequent delay now has providers wondering about how to submit claims (most consultants are recommending following the IFR guidelines until CMS issues further guidance) and worried that the documentation they are collecting from referral sources won't be adequate.
IFR POTHOLES?
“One minute, the IFR is in effect, the [certificate of medical necessity for power wheelchairs] is gone, a face-to-face exam is in, a [mobility assistive equipment] formulary is implemented, we all begin an unprecedented educational process to the physicians and, lo and behold, a few months later, the IFR is rescinded,” says VGM's Keiderling.
“That's not a bad thing, but all this could have been avoided had CMS just listened to those who wanted to help them understand what ramifications were imminent when this ruling was released without proper educational efforts for all those involved.”
The delayed rule could now take effect as early as April 1 (see “Time on Our Side,” page 12). But significant questions remain.
“The [IFR] regarding the physician face-to-face exam is causing a tremendous amount of confusion,” points out Hostak.
Under the rule, the physician or treating practitioner is required to give the supplier a written order within 30 days after a face-to-face exam — and to support it with documentation in lieu of a CMN. Providers have called the time frame unrealistic and are asking for its extension to 60 days.
“It came right on the heels of a new NCD for mobility assistive equipment,” Hostak says. “Early on, suppliers had a lot of questions related to implementation, documentation and their responsibilities. Medicare coverage and billing criteria is not simple, and all of this change proved to be too much with too little detailed guidance.”
Published in August and effective Oct. 25, 2005, the IFR also offered physicians a separate payment of $21.60 for their efforts. But in December, a congressional directive postponed the use of funds to implement the IFR until April 1. And on Feb. 14, CMS issued a fact sheet asking physicians and other providers to hold off submitting Medicare claims for PWCs that include the add-on payment until after April 1, adding another layer to the claims confusion.
Mari Gorney, mobility consultant for Rothschild's Home Healthcare Center in Syracuse, N.Y., believes the changes effected by the IFR “are ultimately going to be positive.” But “training and implementing new regulations can be quite a strenuous task in an already hectic field,” she says.
She also worries about “getting the word out to physicians and clinicians so they are aware of what is necessary for coverage and are able to satisfy documentation needs in a timely manner.”
Ylonen, too, has reservations about physician documentation. “Most physicians don't document real, pertinent information that pertains to [the patient's] mobility,” he says.
Bachenheimer agrees. “Medicare policies need to be consistent with the practices of most physicians, or they should rely upon other clinicians, such as therapists, to provide a more detailed documentation record.”
According to Eric Sokol, director of the Washington, D.C.-based Power Mobility Coalition, “suppliers don't have the clinical knowledge to make the determination if the physician notes support the diagnosis. Under the rule, it seems the suppliers have to make that determination — which chart notes support the diagnosis and meet the CMS requirements.”
What's needed, he says, is for CMS to cite specific expectations.
“What's happened is that there is now 100 percent discretionary authority for CMS and its contractors to be able to reject claims: ‘I can't read this. Claim denied’ [or] ‘This doesn't really support that diagnosis. Claim denied,’” says Sokol.
The provider needs to know exactly what CMS is looking for, he states, adding that if the “physician has done XYZ in the algorhythmic process,” the provider should be able to expect to be paid.
DANGEROUS CURVE
As if new codes, new prices and the IFR weren't enough to deal with, competitive bidding also looms. Set to begin in 2007 in 10 as-yet-unknown major metropolitan statistical areas, Medicare's bidding program for DME is almost universally dreaded by industry professionals.
Cole cites it as one of the major issues facing the industry. Already, stakeholders have expressed concerns that it will lower reimbursement to impossible levels, push smaller providers out of the business altogether and result in less access for end users.
“The biggest unknown is how competitive bidding will affect the overall market,” Cole says. “How is it really going to affect the whole industry? Is it going to have an effect just on pricing or will it have an effect on access? We won't know until we get farther into it.”
Ylonen also foresees problems with competitive bidding. “It's easy to throw out a warehouse delivery bid for equipment,” he says, “but this doesn't apply to power mobility or custom mobility.
“When it's custom or adaptive, I don't understand how the feds can think that going to competitive bidding in that product mix is going to benefit end users. It's probably going to cost them more money. I'm hoping it does not fly.”
While most believe there is little hope that competitive bidding, which is decreed by the Medicare Modernization Act, will go away, industry players can still work to soften its blow.
“Competitive bidding is also a crossroad, a present-day issue,” says Meuser. “Although competitive bidding is not scheduled to take effect until 2007, and [then to be] expanded in 2009, now is our time to act.”
Like many manufacturers and providers, Meuser is pushing for passage of legislation authored by Reps. David Hobson, R-Ohio, and John Tanner, D-Tenn. The Hobson-Tanner bill (H.R. 3559), he says, would “correct the most serious consequences of competitive bidding.”
Among other provisions, the bill's proposed changes to the MMA would exempt rural areas, including MSAs with fewer than 500,000 people and urban areas with low population density; allow small businesses to continue providing HME at the competitive bidding rate; and require quality standards to be in place prior to the implementation of competitive bidding.
If competitive bidding is allowed to proceed unchecked, Meuser says, it will “threaten quality of service, discourage competition, restrict patient access to home care and threaten small businesses.”
A YIELD TO STANDARDS
Along with competitive bidding come other issues: provider quality standards and mandatory accreditation.
Beginning with the 10 areas tagged for competitive bidding next year, participating providers in all product sectors selected for bid (also not yet released by CMS) will need to adhere to new CMS quality standards and will also have to be accredited — though the standards have not yet been finalized nor accreditors named.
HME leaders have championed new standards as a way of boosting the industry's professionalism and weeding out fraudulent providers. But the proposed quality standards released by CMS in September drew fire from the American Association for Homecare, which called them “overly prescriptive.” What the final standards will look like when they are issued — currently expected later this spring — is another question mark.
Still, stakeholders like Meuser believe they will ultimately be for the good of the industry. “The standards are important in ensuring that providers have an even playing field within the Medicare program and are required to maintain equivalent business and service standards,” he says.
“These standards will increase regulations, thus increasing the cost to providers of providing services. Even with these increased costs, it is the road the industry is choosing to take to clearly reveal a provider's level of skilled professionalism and set a standard for responsible caregiving.”
Mandatory accreditation for those wishing to do business with Medicare is another way of ensuring that providers working in that arena are professional, ethical, well-run businesses, say supporters. But which agencies will be authorized as accrediting bodies is also still up in the air, leaving providers who are not already accredited unsure of whether to proceed or wait.
Though frustrated at the lack of information about accreditation, HME advocates feel it could help the industry's reputation.
“There still persists the perception that the industry is rife with fraud and abuse, when in actuality, the vast majority of providers are in the business to provide a valuable service to those with real medical needs,” says Bachenheimer.
That reputation, points out The Med Group's Clayback, has become an “obstacle to adequate funding.
>“The isolated instances of fraud and abuse have tainted the market from a payer perspective,” he says. “Medicare has responded with major changes, and this has created confusion in the marketplace with suppliers, clinicians and physicians. While some of the changes are positive, there need to be some clarifications to get to a workable environment.”
THE ROAD AHEAD
So what lies ahead for the mobility sector? Perhaps surprisingly, most stakeholders are optimistic. They point to new relationships with regulatory officials and legislators, increasingly sophisticated products and positive demographics.
“I see the market just growing because there will be more need,” says Joe Pepitone, mobility manager for the seven-store Kohll's Pharmacy and Homecare chain in Omaha. “I see reimbursement sources coming up with ways that are faster, more streamlined and more appropriate. There is a lot of analysis going on regarding our business. I can only think it is in the best interest for all of us.”
Hoveround's Cole also predicts a growing marketplace. “We're still at the beginning of the bell curve as to what it's going to become,” he says. “We've got the products, the technology [and] the wherewithal to provide this technology.”
“The strides in this area are tremendous,” adds Sokol, noting that products are getting better, lighter and cheaper. “The industry is working together toward common expectations and goals.
“In Congress, the industry's reputation has certainly increased, and I am hopeful that we can put aside these images of fraud and abuse and establish a meaningful dialog with CMS and a working relationship with champions in Congress.”
In the end, it's the user who will really win out, believes Gorney. “One of the upsides [of the market] would be the recognition by the government … to address the issues related to patients' home needs in more detail,” she says. “Over the past couple of years, much attention has been brought to the subject of mobility and, as a result, changes are happening. These changes require planning, implementation and education to providers and patients but, ultimately, [they] will be in the best interest of both providers and patients.”
Coding Conundrum
In February of 2005, CMS issued 49 new HCPCS codes for power mobility devices, and also established testing requirements to ensure that these products could be grouped together based on industry standards for performance and durability. The new codes were scheduled to be implemented Jan. 1, 2006.
But in September, CMS revised its newly released codes, increasing the number to 63 and modifying testing requirements. And in October, the agency announced it would delay implementation of the new codes entirely until they could be reworked once more with input from a technical panel comprised of power mobility manufacturers, suppliers, clinicians and other stakeholders.
Speaking at Medtrade last fall, SADMERC Medical Director Dr. Doran Edwards said he planned to devote full attention to the codes, with the goal of settling the issue “once and for all so that the codes can remain in effect for a number of years without having to be tweaked.” According to Edwards, determining performance categories for power wheelchairs would be the initial matter at hand for the panel. He also noted concern about possible inconsistencies among testing labs, as testing requirements should be consistent to ensure product quality, safety and the best clinical outcomes for users.
On Feb. 8-9, the Technical Expert Panel began its work with members including:
Gerald White, Pride Mobility Products; Mark Greig, Sunrise Medical; David Mahilo, Invacare Corp.; Anthony DiGiovanni, Hoveround; Tara Gentile, Permobil; Simon Margolis, National Seating and Mobility; Peter Axelson, Beneficial Designs (representing RESNA, the Rehabilitation Engineering and Assistive Technology Society of North America); Leonard Frier, MET Laboratories Inc.; Robbie Leonard, PT, Leonard Physical Therapy; Anita Pear, clinician consultant and New York University assistant professor; Greg McGrew, University of Virginia; Mark Schmeler, University of Pittsburgh; Larry Schneider, University of Michigan; and Bill Ammer, Ammer Consulting.
CMS contractor ECRI, project facilitator, was to prepare a report on the meeting including the panel's recommendations. At press time, the report was expected to be issued by the end of March, when CMS would then determine how to proceed with code development.
Based on that timeline, according to Seth Johnson, chair of AAHomecare's Rehab and Assistive Technology Council, “new codes could potentially go into effect as early as July 2006, but the timing will largely be dependent upon the makeup of the new codes and any additional testing that is required.”
“This is the third formal attempt to come to a consensus that you agree with, CMS agrees with and the DMERCs agree with,” Edwards told the Medtrade audience. “This will impact the future of power mobility. We must get this right.”
Industry: Gap-Fill Just Won't Work
According to a study released in August by the American Association for Homecare, if CMS' gap-filling methodology is used to set prices for new power wheelchair codes, it could result in an average payment reduction of 25 percent.
CMS uses gap-filling to price new DME codes. The objective of the method, AAHomecare explains, is to estimate what the price of a current piece of equipment would be if it were on the Medicare fee schedule in 1987. The 1987 estimated price is then trended forward to 2004 using the actual increases in fee schedule payments mandated by statute and regulations. CMS uses the Consumer Price Index for urban consumers (CPI-U) in its gap-filling formula to impute the pricing trends of DME products from the fee schedule base year to the current price.
AAHomecare commissioned research firm Muse & Associates to conduct a study of power wheelchair pricing trends and to analyze the impact of CMS' pricing methodology on these products. The study found that:
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Using the gap-filling technique implied that prices, as measured by the CPI-U, increased by a rate of 4 percent per year since 1987.
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Prices in the three major power wheelchair codes either increased insignificantly, or actually decreased.
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Of all the power wheelchair products surveyed, only nine had historic price information prior to the year 2000.
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The current power wheelchair product with the oldest historic pricing information had an average price increase of 1 percent per year since 1992.
Because results showed that the CPI-U component of CMS' gap-filling methodology overstates the actual price increases in power wheelchairs, the association recommended that CMS could impute 1992 as the historic pricing year for all power wheelchair equipment. “This adjustment would result in an average reduction in payment for the new power wheelchair codes of about 9 percent,” the study concluded.
AAHomecare presented the study findings during a meeting with CMS officials in September.
