Home Health & Hospice Week

Confused by your Medicare contractor's local coverage policies?

If the General Accounting Office gets its way, local policies would be abolished altogether and the Centers for Medicare & Medicaid Services would make all coverage decisions on a centralized, national basis.

Variations in local coverage lead to unfair geographical biases, the watchdog agency argues in "Medicare: Divided Authority for Policies on Coverage of Procedures and Devices Results in Inequities" (GAO-03-175).

Durable medical equipment suppliers, however, shouldn't have to worry too much about those inequities, the GAO contends in the report. Unlike other Medicare contractors, CMS requires the four DME regional carriers to jointly develop and utilize one set of policies, it says.

"While DME regional carriers develop coverage policy that has national applicability, they follow a policy development process that is similar to that employed by carriers and fiscal intermediaries" for local policies, the GAO says.

Some in the DME industry aren't happy with those operating procedures. Developing what is basically national policy on DME through less-stringent local rules allows CMS and DMERCs to make back-door regulations with less hassle on their part, protest some observers.

However, DMERCs consult with the industry through advisory committees that comment on local medical review policies and by taking public comments on the policies, the report notes.

And requiring all DMERCs to use one policy assures that DME companies in multiple states can follow one set of coverage rules for all locations, the GAO says.

In any case, it's not clear that the GAO's proposal to scrap local policies is likely to get very far. CMS firmly opposes the idea of eliminating local policies, maintaining, among other things, that local policies are faster to implement and allow Medicare to experiment with new coverage options.

Editor's Note: The report is at www.gao.gov/new.items/d03175.pdf.