Home Health & Hospice Week

HME suppliers question fee calculation.

Supplying replacement batteries for blood glucose monitors just got a lot tougher.

New HCPCS codes and reduced fees for these items became effective Jan. 1. The Centers for Medicare & Medicaid Services announced in a Dec. 2, 2005 transmittal that HCPCS code A4254 (Replacement battery, any type for use with medically necessary home blood glucose monitor owned by patient, each) would be deleted. CMS also added four new battery codes.

The reimbursement fee for deleted code A4254 was $6.58. The new codes and fees for blood glucose monitor batteries are: • A4233 (Replacement battery, alkaline [other than J cell] ...), $0.80;
• A4234 (Replacement battery, alkaline, J cell ...), $3.63;
• A4235 (Replacement battery, lithium ...), $2.34; and
• A4236 (Replacement battery, silver oxide ...), $1.68. Suppliers Question Reasonableness "According to inherent reasonableness, they can't reduce anything more than 15 percent," protests Kathy Fiscina, controller for Diabetic Supply of America based in Naples, FL. "Where did they get the jurisdiction to do this?" she wonders.

With all the different types of batteries currently used in blood glucose monitors, the HCPCS workgroup determined using just one code to describe them was no longer sufficient, a CMS spokesperson tells Eli. The workgroup made the decision to discontinue the one generic code and create four separate, more precise codes for the different types of the batteries, the spokesperson says.

As for the pricing, the CMS spokesperson contends that technology has changed and batteries are cheaper than they used to be. With the change in the HCPCS codes and re-pricing based on the specific types of batteries, fees will be lower than before, the spokesperson notes.

"It wasn't just a new code out of the hat, it was a new code replacing an old code," Fiscina contends.

To determine the fees for these new HCPCS codes, CMS deflated the product's price back to what it would have been in 1986. Then, CMS used a formula that considers annual consumer price index increases to calculate the new price.

While the law requires state-specific fee schedule amounts, generally when using this methodology the prices don't vary by state, so the result is one nation-wide fee, the CMS representative explains.

Some manufacturers and suppliers have questioned the fee calculations for these batteries, says the CMS rep. The agency has supplied them with spreadsheets of the calculations to review.

Not so fast: Fiscina contends the calculations are based on Internet retail prices and don't take into account shipping or suppliers' labor and supply costs.

CMS is reviewing the calculations, the CMS spokesperson says. If the agency finds an error, such as not factoring in shipping or a particular product not fitting appropriately under a code, CMS will redo the calculations and reissue the rates, the rep [...]