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Diving Deeper into DMEPOS Interim Final Rule

Posted on in Billing/Reimbursement, HME Government Issues, Legislation, Government and Advocacy

Late yesterday afternoon the Centers for Medicare and Medicaid Services (CMS) released information pertaining to the interim final rule that the industry has been anxiously awaiting for since August. After having 24 hours to comb through the regulation, we feel there are sections in the text that need further clarification. The VGM Government team has consulted with the CMS Competitive Bidding Ombudsman’s Office to get further explanation on sections of the text.

Here is what we know so far:

Click here to view a detailed CMS Fact Sheet for additional explanation and sample rates.

Who Does This Regulation Impact?

This IFR benefits providers servicing patients in rural areas, as defined by CMS. To clarify further, this regulation is not effective for patients residing in non-bid areas, only rural. Click here to visit the PDAC that lists what CMS deems to be rural zip codes. In short, there are major metropolitan areas (most being competitive bidding areas), then there are micropolitan areas such as Des Moines, Iowa; Green Bay, Wisc.; Missoula, Mont.; Bowling Green, Ky.; etc. These areas and the surrounding communities are not considered rural but suburban by CMS standards.

While 71% of non-CBA zip codes are considered “rural,” only 21% of the population resides in these areas, which shrinks the scope of the relief. The scope was narrowed from all non-CBA areas due to a significantly higher costs. Based on regulatory guidance, it appears that this was changed throughout the rulemaking process from what the IFR may have originally held.

When Does This Go Into Effect?

The IFR will be effective June 1-Dec. 31, 2018, providing seven months of relief and IS NOT retroactive.

At first glance of the CMS press release, this appears to be a real extension of the Cures Act, which is not the case because it does not provide relief for all non-CBA areas.

What Does This Mean for State Medicaid Reimbursement Rates?

It is difficult at this point to see the concrete impacts this short-term solution will have on Medicaid programs in the individual states. This should mean that the state portion of funding would increase, meaning that state governments should have an increase in dollars coming to them from the federal government. It is unclear if state Medicaid agencies will pass that additional funding along to providers, as it was largely unaddressed by the IFR.

We look forward to working with state associations to engage with their state Medicaid directors to ensure that providers are properly being reimbursed based on existing law. In states that chose to adopt Medicare fee schedules, it is worth reaching out to the states to determine if their rates will see an increase based on this IFR.

An example: The states of Iowa and Oklahoma have both said they understand there are different rates in the state (CBA/non-bid/rural), but their systems will not allow for three different rates to be paid out. Each state will have its own method of complying with these changes, so providers must remain engaged in conversation with their agencies to monitor proper payment methodologies.

Did CMS Remove the Oxygen Double Dip?

It appears that CMS has not removed the oxygen double dip entirely, but acknowledged that this offset has resulted in fee schedule amounts being lower than the single payment amount (SPA) in urban/CBA areas. With this increase in reimbursement for the rural areas, CMS shares that with the increase back to the blended rates, it “would result in fee schedule amounts for oxygen and oxygen equipment in these areas being higher than the SPAs paid in all of the CBAs.”

Where Does the Industry Go from Here?

There are two separate tracks for reforms that the grassroots must flood in order to drive the demand for proper, lasting changes:

Regulatory: CMS is soliciting public comments for guidance in implementing a long-term solution for establishing reimbursement rates. Because CMS cites public comment in their detailed findings, the industry must provide an abundance of public comment that must include the cost of providing care to patients and different challenges of caring for rural patients. VGM will be producing template comment letters in the coming weeks and simple to follow “how-to” comment guides that providers can follow.

Legislative: H.R. 4229 provides two years of relief in legislative language, which CMS would be forced to follow, and currently stands at 145 cosponsors. This IFR does not kill H.R. 4229 as it provides real, clear-cut relief to suppliers. We will also need to drive the push for a Senate companion bill to have consensus in both chambers of Congress. VGM will release updated Action Center engagements to easily message your members of Congress

While we are disappointed that the relief did not go as far as we had hoped, it does provide some extra air to providers in the rural areas, where many are on the verge of closing their doors. Long-term reform is our priority to prevent the need for a “band-aid” solution. We will continue to be engaged with policy makers on Capitol Hill to fix this problem permanently. As we have additional implementation analysis and resources, we will share them as soon as it is available.