Page 8 - HME Business, August/September 2019

News / Trends / Analysis
CMS Suggests Gap-Filling Changes in Proposed Rule
Recently unveiled 2020 ESRD/DMEPOS Proposed Rule includes various changes to how reimbursement rates are set.
People in HME
AZ MediQuip Puts Two key managers into new roles that will help the provider launch its next growth phase.
A
rizona retail HME giant AZ MediQuip (azmediquip.com) has made two new management advancements to add depth
On Monday, CMS released a Proposed ESRD/DMEPOS Rule for 2020 that contains several provisions related to home medical equipment, including changes to its method for “gap-filling” reimburse- ment rates on certain DME items.
Important links for the proposed rule:
• The complete text of the proposed rule is available at bit.ly/2LU6dy3
• A CMS fact sheet on the proposed rule is available at go.cms.gov/2YkNzWz
The HME-related provisions concern gap-filling; payment requirements; requesting market-based data related to diabetic testing suppliers; and change of ownership.
The gap-filling change is particularly worth noting as it shows CMS plans to alter the way its shape reimbursement rate changes on certain items.
To regularly adjust its reimbursement rates Medicare needs to estimate what it should pay
for various items in the time since a fee schedule was initially set. (Those initial amounts were set for different items in different years.) It bases these esti- mates using what it calls “reasonable charge data.”
However, existing statute does not specify how CMS should make its estimates when the charge data doesn’t exist. That’s where gap-filling comes into play.
Since 1989, CMS has used a process used gap- filling to literally fill the gap in the reasonable
charge data for new DMEPOS items. CMS has used various methods and resources to gap-fill DMEPOS fee schedule amounts including use of fees for comparable items; supplier prices; manufacturer’s suggested retail prices (MSRPs); wholesale prices plus a markup percentage to convert the prices to retail prices; internet catalog pricing; and other methods.
The net-net is that the gap-filling process is very complex and hard for providers to follow. In comments to 2019 proposed ESRD/DMEPOS rule- making, stakeholders asked for increased transpar- ency. Specific concerns included:
• How CMS determines that items and services are comparable.
• Sources of pricing data other than fees for comparable items.
• Timing of fee schedule calculations and use of interim fees.
• Public consultation.
• Pricing data and information integrity.
• Adjustment of newly established fees over time. In response, CMS proposes several gap-filling
changes in the proposed rule:
For new DMEPOS items without a pricing
history, CMS would establish five main categories of components or attributes of DMEPOS items (as shown in Table 1 of the aforementioned fact sheet) that would be evaluated to determine if a new item is comparable to an older existing item for gap- filling purposes.
If the new item is determined to be comparable to the older existing item, CMS would base the new items fee schedule on the fee schedule amounts for the older existing item.
If there are no comparable items to use for gap- filling purposes, the fee schedule amounts for the new item would be based on other, more accu- rate sources of commercial pricing data to establish Medicare payments -- such as internet retail prices or information from supplier invoices -- deflated to the fee schedule base period and updated by the covered item update factors.
If supplier or commercial price lists are not avail- able, verifiable, or do not “represent a reasonable relative difference in supplier costs of furnishing the new DMEPOS item relative to the supplier costs of furnishing DMEPOS items from the fee schedule base period,” CMS would use “technology assessments” to determine the relative costs of the newer DMEPOS items compared to older DMEPOS item to establish the fee schedule amounts for the newer items.
If supplier or commercial prices are used to establish fee schedule amounts for new items, and the prices then go down once the market for the new items is more established, Medicare would adjust its rates based on the new, updated prices. CMS noted it considers a one-time decease to the fee schedule amounts using the new, lower prices to be reasonable.
On the other hand, CMS does not believe that a similar adjustment is necessary to account for increases in prices and is not proposing anything in that regard, but says it is inviting comments on the issue.
While complex, HME stakeholders should review both CMS’s fact sheet (go.cms.gov/2YkNzWz) and the DMEPOS provisions of the proposed rule (bit. ly/2LU6dy3), starting on page 146.
to its management team in preparation for future expansion.
The company has named Mike Radzik as Regional Manager for the Phoenix Market. An eight-year veteran of AZ MediQuip, Radzik will oversee all aspects of the company’s four Phoenix metro area stores. Radzik was most recently AZ MediQuip’s Mesa Store Manager.
Also, Kevin Behrmann, who has been with the provider for two years, has been named Manager of Purchasing and Logistics. Behrmann will centralize the purchasing and inventory management for all AZ MediQuip locations. He was most recently AZ MediQuip’s Scottsdale Store Manager.
“Mike and Kevin are taking on key positions
to allow AZ MediQuip to begin our next phase
of growth,” said AZ MediQuip President Mark Nicotera. “AZ MediQuip same-store sales growth are robust and beyond our projections. We know that what we do is needed elsewhere in Arizona and beyond and we are extremely well-positioned to provide access and solutions to customers in many more locals” said Mark Nicotera, President of AZ MediQuip.and solutions to customers.”
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