No More Cuts to Home Medical Equipment in Deficit Reduction Legislation

The Budget Control Act of 2011 (BCA) requires the creation of a 12-member, bipartisan joint House-Senate committee to recommend cuts in federal spending, including Medicare. We strongly urge committee members not to include any further cuts to home medical equipment and services (HME) in their recommendations. HME (or durable medical equipment) has been targeted for significant payment reductions to reduce Medicare spending over the past seven years and cannot withstand additional cuts. Reducing HME payments will threaten the ability of the health care sector to save money by allowing patients to stay in their homes rather than in more costly settings like hospitals and nursing homes.

During the recent deficit reduction negotiations, conducted by the White House and congressional leaders, cuts to Medicare reimbursement for HME were included in the list of options. The list of cost-cutting targets included reductions to HME payments that totaled $5.4 billion over 10 years by making cuts to Medicaid HME payment rates by basing pay on competitive bidding rates and prepayment review for power wheelchairs.

We strongly oppose these two provisions because they will hamper access to quality home medical equipment and services. Further, these provisions will unnecessarily reduce the services that beneficiaries require:

Prepayment Review of Power Wheelchair Claims

• Require prepayment or earlier review for all power wheelchair claims.
• Allow the Centers for Medicare and Medicaid Services (CMS) to conduct prepayment or earlier review on power wheelchair claims to ensure they meet the existing criteria for coverage and, according to the proposal, reduce improper payments and prevent fraud.

Limited Medicaid Reimbursement of HME Based on Flawed Competitive Bidding Medicare Rates

• Limit federal reimbursement for a state’s aggregate Medicaid spending on certain HME services to what Medicare would have paid in the same state for the same services.

Position on Prepayment Review of Power Wheelchair Claims
Homecare providers make every effort to comply with complicated and subjective Medicare documentation rules and regulations. However, unlike other Medicare providers, HME providers are dependent not only on compliance with detailed policy requirements, but also on the level of detail and accuracy of documentation of medical necessity provided by physicians.

The Medicare documentation rules have become so complicated in an effort to stamp out fraud that compliance by legitimate providers has become extraordinarily difficult and are subject to Medicare contractor interpretation. The lack of clarity within the documentation policy is evidenced by Medicare contractors’ varied widespread audit results. Congress should work with the homecare community to formulate recommendations for early review of documentation, and develop clear and concise rules so that physicians, therapists as well as claim reviewers understand what documentation is required for the provision of a power wheelchair.

While the HME sector opposes “pre-payment” review for power wheelchairs, AAHomecare has an alternative proposal that moves Medicare away from its current pay-and-chase system to one that provides for real-time documentation analysis.

Position on Limiting Medicaid Reimbursement of HME based on Flawed Medicare Competitive Bidding Rates
The Administration and congressional budget negotiators considered a proposal that would reduce Medicaid payment rates for competitively bid items to the Medicare rates set by bidding. This proposal has two fundamental flaws. First, it is unclear whether the bidding program is sustainable over the longer term. Independent studies called for by Congress to evaluate the program’s effectiveness have not been completed. Therefore, applying these Medicare payment rates before these studies are complete would be premature and potentially harmful to seniors and persons with disabilities.

Also, Medicaid programs are structured very differently from Medicare. Many states discount their payment rates by a certain percentage off the Medicare rate. For example, a state Medicaid program may pay 80 percent of the Medicare payment rate for items and services. In addition, other states waive the 20 percent beneficiary co-payment because Medicaid patients cannot afford co-payments. Still other states combine these two provisions (i.e., the 20 percent reduction off the Medicare payment rate and waive the 20 percent beneficiary copayment amount). Therefore, if this provision were enacted by Congress, many state Medicaid payment rates would be up to 40 percent below the Medicare payment rates established by competitive bidding. Homecare providers will simply not be able to furnish items and services at such payment rates and be unable to accept and treat Medicaid patients if this proposal is adopted.

We urge Congress to oppose any further cuts to homecare.

HHS Inspector General Report on Power Wheelchair Use in Medicare Triggers Misleading News Coverage

Properly Prescribed, Power Wheelchairs Prevent Falls and Keep Thousands of Seniors and People with Disabilities Safe and Independent at Home, Lowering Healthcare Costs for Taxpayers

A July 2011 report by the U.S. Department of Health and Human Services Office of Inspector General (OIG) about power wheelchair usage in Medicare back in 2007 has resulted in misleading articles published in several media outlets, including USA Today.

The findings section at the front of the OIG report, “Most Power Wheelchairs in the Medicare Program Did Not Meet Medical Necessity Guidelines,” begins with the statement, “Sixty-one percent of power wheelchairs provided to Medicare beneficiaries in the first half of 2007 were medically unnecessary or had claims that lacked sufficient documentation to determine medical necessity.”

This suggests that most power wheelchairs provided in 2007 were not medically necessary. But a reader would only have to finish the paragraph to discover that the OIG report found the wheelchairs were not medically necessary in only two percent of the cases, out of the 375 sample claims the OIG reviewed. In those two percent of claims, the OIG found that manual wheelchairs or scooters would have been more appropriate for the Medicare beneficiary. In seven percent of the claims, the OIG said “beneficiaries should have received a different type of power wheelchair than was provided.” And 52 percent of the claims were “insufficiently documented to determine whether the power wheelchairs were medically necessary.”

In other words, in most cases examined in the study, the OIG could not determine whether or not the wheelchairs were medically necessary – in their sample of four-year-old data, which does not reflect current regulations or reimbursement rates.

Yet, last month, USA Today published a July 13 news article about “medical scooter fraud” that stated, “Medicare’s inspector general also showed that 61% of the motorized wheelchairs provided to Medicare recipients in the first half of 2007 went to people who didn’t qualify for them….” An August 11 editorial in the South Florida Sun-Sentinel used the same OIG statistic to conclude that “about $100 million was wasted.” Neither statement is supported by the OIG report, which uncovered a number of cases where the beneficiary should have received “a more expensive power wheelchair.”

Tyler Wilson, president of the American Association for Homecare, said, “It’s disappointing but not surprising that the OIG report led to distorted news coverage. The American Association for Homecare has zero tolerance for waste and fraud, and we have lobbied for stronger anti-fraud measures for Medicare for years. But policymakers must not forget that properly prescribed, power wheelchairs help prevent falls and keep thousands of seniors and people with disabilities safe and independent at home, which lowers healthcare costs for taxpayers.”

“The OIG report ignores the real problem with Medicare’s system for reviewing claims which is the government’s failure to adopt an effective documentation process for determining a beneficiary’s medical necessity for a power wheelchair,” said Wilson. “Physicians, providers, clinicians, and consumer advocates have repeatedly warned Congress and the Centers for Medicare and Medicaid Services (CMS) that the current documentation process is confusing, inefficient and subjective.”

Home medical equipment providers are concerned that neither the media nor government investigators are focusing on the fact that 52 percent of the claims that the OIG reviewed had insufficient information for the investigators to determine whether or not a Medicare patient had a medical need for a power wheelchair.

“This is the statistic that puts the real problem in perspective,” said Georgie Blackburn, who is vice president at BLACKBURN’S, a home medical equipment provider in Tarentum, Pa. She added that the 2007 period reviewed by the OIG was just after CMS revised documentation rules, but failed to properly educate physicians and providers on the changes.

“The bottom line is that providers file extensive paperwork with their reimbursement claims so they can be repaid for the power wheelchairs that they have already purchased from manufacturers and delivered to Medicare beneficiaries,” she said. “We badly want to provide CMS with all the information they need to process claims so our businesses can stay open. If information is missing, it’s because their guidelines are confusing physicians and providers.”

One of the major problems is that providers have to depend on physicians to supply patient medical information. Blackburn said that CMS has failed to supply physicians with a tool or template to document the patient medical information that is now being required. When the information isn’t available to be reviewed, she said the claim falls into the insufficient information category and the providers are wrongly blamed.

“Physicians are used to documenting patient medical history for their purposes, not for what CMS is looking for to document medical necessity,” she said. “CMS needs to work with physicians and providers to develop a policy that works for all the stakeholders.”


The American Association for Homecare represents durable medical equipment providers, manufacturers, and others in the homecare community who serve the medical needs of millions of Americans who require oxygen equipment and therapy, wheelchairs and assistive technologies, medical supplies, inhalation drug therapy, and other medical equipment and services in their homes. Members operate more than 3,000 homecare locations in all 50 states. Visit www.aahomecare.org/athome.

CONTACTS: Michael Reinemer, 703-535-1881, michaelr@aahomecare.org; Tilly Gambill, 703-535-1896, tillyg@aahomecare.org

Meet the Team: Melva Mazur, Senior Director of Membership

Melva Mazur is the senior director of membership at AAHomecare. She joined the team in the Fall of 1993.

As the longest-serving member of the staff, Melva has worked in nearly every department since her first day on the job. Her experience ranges from government relations to education to her current department, membership. Melva is a walking encyclopedia of member information, based on her duty as keeper of the AAHomecare member database.

Melva received her bachelor’s degree at Towson University. Before she joined AAHomecare, she worked as a teacher and a baker for several years – and is a certified foodie, through and through.

Fun Facts

• Melva has lived in two foreign countries – Japan and Germany – and visited over 30 others.
  
  
• Melva is the only person in the office who has spent the night in an ice hotel (on purpose) – Hotel de Glace in Quebec.
  
  
• Melva is a longtime collector of Japanese arts and crafts, with items from the Meiji era to the present.
  

Medical Supplies Council Pushes Full Agenda

AAHomecare’s Medical Supplies Council focuses on HME policy issues that affect audit, payment and coverage issues related to diabetes, wound care and incontinence issues. The Council has worked on the following issues: ostomy claim denials, surgical dressings policy coverage, negative pressure wound therapy (NPWT) accreditation standards and the issue of inadequate documentation from physicians in the diabetes space.

• Most recently regarding NPWT, AAHomecare and Council members have met with the White House, the Centers for Medicare and Medicaid Services (CMS), the Food and Drug Administration and members of Congress on the need to establish accreditation standards for NPWT and have received unanimous support for this initiative. The Association continues to work closely with other NPWT stakeholders including the Advanced Medical Technology Association and the Alliance for Wound Care Stakeholders. The Association has also worked closely with members of Congress on Congressional sign-on letters to CMS supporting NPWT standards and AAHomecare continues to work closely with those offices. In early August, House and Senate Congressional sign-on letters were sent to CMS Administrator Berwick urging the agency to implement accreditation standards for NPWT providers.
• In the ostomy space, AAHomecare and council members have been reviewing the ostomy supplies policy regarding concerns about patient claims of denials for ostomy orders. The Association sent a letter at the end of July to all DME MAC medical directors and to medical specialists at CMS calling for a review of the ostomy supplies policy asking for greater flexibility with claims, taking into consideration the medical need of ostomy patients especially when the “usual maximum amount” is insufficient. AAHomecare worked closely with the United Ostomy Associations of America, on this initiative, who endorsed our letter.
• On the issue of diabetes, the Association is working with Council members to review educational materials for prescribing diabetes supplies and has proposed recommendations to address concerns with physicians’ inadequate documentation. These recommendations will be submitted to all DME MAC medical directors.
• As far as surgical dressings policy is concerned, council members are collecting data on affected Medicare beneficiaries regarding the types of surgical dressings that are used in order to effect change with the DME MAC medical directors so as to eliminate restrictions on current policy coverage.
• Managed Care/Insurance Coverage/State Issues: The Medical Supplies Council also monitors Medicare, Medicaid, managed care and other insurance coverage issues and reviews cases where medical supplies and related services and accessories are not appropriately reimbursed. Medical Supplies Council members are actively engaged on state issues and AAHomecare updates council members regularly on state Medicaid reimbursement and state competitive bidding news affecting the medical supplies sector.

The Council is chaired by Raymond Kreiger, Vice President, Contracts and Pricing with Byram Healthcare and the Council’s vice chair is Laura McIlvaine, Vice President, Government Affairs, Shield Healthcare.

“AAHomecare updates the council on pertinent issues in the medical supplies space. The council reviews a legislative and/or regulatory strategy for moving forward on any given issue from competitive bidding and audit matters to specific reimbursement and coding and coverage issues which is why council membership is a valuable way to address matters that are of concern to council members.” said Kreiger.

For more information about the Medical Supplies Council contact Alex Bennewith, alexb@aahomecare.org or (703) 535-1891.

Meet the Team: Stacey Harms, Manager of Government Affairs

Stacey Harms is the manager of government affairs at AAHomecare. She joined the team in the spring of 2005.

As a member of the government relations team, Stacey attends Capitol Hill visits and lobbies for homecare issues, both regulatory and legislative. She is the resident expert on obscure regulatory policy, poring through several hundred page CMS documents upon their release and drafting detailed position papers on any given cause within the association. Stacey keeps a constant “ear to the ground” in Washington, given her many contacts (many of whom she considers friends) – as evidenced by her Blackberry usage data each month.

Stacey received a bachelors and masters degree in journalism in 2004 and 2005, respectively, from Northwestern University's Medill School of Journalism. She has covered a wide-range of issues, including healthcare, politics, bull riding and sports.

Fun Facts

• Stacey is a sharp shooter – she has attended many boot-wearing events where she gets to show off her shotgun skills – rooted in the ten years she lived in Oklahoma.
  
  
• Stacey is a proud member of the Junior League of Washington, an organization of women committed to promoting voluntarism, developing the potential of women, and improving communities through the effective action and leadership of trained volunteers.
  
  
• Stacey once danced on stage with George Clinton at a Parliament Funkadelic concert.