Home Health & Hospice Week

Move comes as CMS prepares to set new wheelchair rates using the controversial method.

Relief could be on the way for home medical equipment providers frustrated with Medicare's gap filling reimbursement - and the change can't come too soon for power wheelchair suppliers.

The American Association for Homecare has commissioned the Washington, DC-based research firm of Muse & Associates to study alternatives to the complex reimbursement method, which has proven a source of headaches for both providers and the Centers for Medicare & Medicaid Services since its 1989 implementation.

"I'm glad they stepped up and are doing this," Peggy Walker of U.S. Rehab tells Eli. "Gap filling is crazy."

With gap filling, CMS determines the median price of products for a particular code and deflates that price back to what it would have been in 1986. To determine the new price, CMS then uses a formula that considers annual consumer price index increases.

When setting new reimbursement rates, however, gap filling fails to account for Medicare CPI freezes. As a result, the reimbursement for new allowables is often too low, critics say. And using gap filling to set rates for products that didn't exist in 1986 also drives down reimbursement.

Furthermore, there are inconsistencies in the way gap filling is calculated from region to region - and even from person to person. "People do it in different ways, even within the same DMERC," reports Walker. "They end up comparing different products."

Gap filling sparked a controversy last year when CMS used the methodology to set new prices for seat and back cushions (see Eli's HCW, Vol. XIII, No. 39). Those allowables turned out to be so low that alarmed industry groups prevailed upon CMS to re-price the items - not much fun for the overburdened agency.

The search for alternatives to gap filling is especially urgent now that CMS expects to issue its new codes and allowables for power wheelchairs by September. Unless CMS adopts another method, the agency will use gap filling to set fees for those codes.

"AAHomecare wants to propose an alternative for pricing the new power wheelchair codes to avoid the disruption to beneficiary access and care that will occur if the fee schedule amounts do not accurately represent the technology included in each new code," says AAHomecare's Kay Cox.

But the study's benefits will go beyond power wheelchair codes, Cox points out.

"Repairing the flawed nature of gap filling will benefit every new technology that is introduced to the marketplace," she notes.