Home Health & Hospice Week

New payment classes are possible.

Medicare has given durable medical equipment (DME) suppliers a glimpse at how it plans to pay for certain types of DME in the near future.

The Centers for Medicare & Medicaid Services released a proposed rule July 24 implementing Section 5101 of the Deficit Reduction Act of 2005 and other requirements.

In addition to outlining a proposed update to the Medicare rate for home health services, the rule outlines the new payment methodology for oxygen equipment, oxygen contents and capped-rental durable medical equipment.

Among the proposals: establishing separate payment classes for new technologies that eliminate the need for refilling and delivery of oxygen contents; the delivery of portable oxygen contents; and the delivery of stationary oxygen contents.

"We want to make sure that our payments for oxygen are appropriate to ensure beneficiary access to the latest technologies and that we are not paying rental amounts that exceed the cost of purchasing oxygen equipment many times over," said Mark McClellan, CMS administrator.

Note: To see an overview of the proposed rule's provisions relating to DME, go to www.cms.hhs.gov/HomeHealthPPS/downloads/DMEBackground.pdf. The deadline for submitting comments is Sept. 25.

• A  new final rule ushers in a new accreditation process for suppliers of durable medical equipment prosthetics, orthotics and supplies (DMEPOS). The rule, released Aug. 1, implements requirements for suppliers to be accredited by independent organizations as meeting new quality standards in order to bill the Medicare program for their wares. The rule also spells out details about the authority of the Centers for Medicare & Medicaid Services to contract  with independent entities to implement the plan-ned competitive bidding program for DMEPOS.

The regulation was released as a component of a final rule on Medicare payment and policy changes for inpatient rehabilitation facilities, will be published in the Federal Register on Aug. 18. For more information and updates, go to www.cms.hhs.gov/CompetitiveAcqforDMEPOS/.

• Home health providers dodged a bullet late in July, reports the American Association for Homecare. A provision that would have extended the freeze on Medicare home health payments through 2009 was struck from a draft bill focused on Medicare reimbursement for physicians sponsored by Rep. Michael Burgess (R-TX).

• Medicare shouldn't rush into implementing pay for performance, members of Congress insisted in a July 27 hearing of the House Energy & Commerce Health Subcommittee.

Representatives asked tough questions of Mark McClellan, CMS administrator, in the second day of hearings on physician payment reform. They wanted to know why Medicare couldn't pay doctors their actual costs for providing care, and how Medicare expected to implement pay-for-performance when many doctors have no health information technology.

"I'm concerned about the rush, as some of my colleagues are, to implement a system of nationwide pay-for-reporting," said Rep. Lois Capps (D-CA). Some legislators worried about using a one-size-fits-all system of P4P for all specialties, and for solo practitioners in rural areas.

• Noridian Administrative Services will serve as the Part A/Part B Medicare Administrative Contractor (A/B MAC) in Arizona, Montana, North Dakota, South Dakota, Utah and Wyoming.

The A/B MAC contract, announced July 31, is the first of 15 to be awarded by CMS in the coming years.

As the A/B MAC, the Fargo, ND-based Noridian will serve as the first point of contact for processing and paying fee-for-service claims from hospitals, home health agencies, physicians and other practitioners in the six states.

The A/B MAC contract, which has a value of $28.9 million for the first year of performance, is the first of 15 to be awarded by 2011 to fulfill requirements of the contracting reform provisions of the Medicare Modernization Act of 2003. NAS will assume responsibilities for the claims processing work in its six-state jurisdiction no later than March 2007.

• Attention DME providers: Don't neglect to get an National Provider Identifier (NPI) for every location. CMS and the agency's contractors issued the reminder to suppliers on Aug. 1, noting that they would be linking Medicare providers with NPIs.  There's one exception to the requirement: A supplier who is a sole proprietor is eligible for only one NPI regardless of the number of locations the supplier may have.

The requirement applies equally to Medicare durable medical equipment suppliers who do not submit claims electronically. Failure to comply could lead to claim delays or rejections, note the feds.