March Forward with Review and Regulation

   CMS Issues New Requirements for Durable Medical Equipment in Skilled Nursing Facilities For years, Medicare has paid for medically necessary durable medical equipment, prosthetics, orthotics, and medical supplies (DMEPOS) for use in the patient's home.

Claims for these supplies were billed to and paid by Durable Medical Equipment Regional Carriers (DMERCs). Capped rental items of durable medical equipment (DME) were billed to the DMERC on a monthly basis; the delivery date ("from" date) on the first claim became the anniversary date of all subsequent claims for the item. Not long ago, Medicare clarified this policy, stating that a Part A stay in a skilled nursing facility (SNF) did not meet the definition of the patient's home. Therefore, medically necessary DMEPOS for a beneficiary covered in a Part A SNF could not be billed separately to the DMERC, and the SNF was expected to provide the beneficiary with all medically necessary DMEPOS during a covered Part A stay.

   Last fall, the Centers for Medicare and Medicaid Services (CMS) issued a change request (Transmittal B-02-087, Change Request 2453) stating that Medicare will make a separate payment for a full month for DMEPOS items, provided the beneficiary was in the home on the "from" date or anniversary date (as defined above) - even if the "from" date is the date of discharge from the SNF. If, however, the beneficiary using DMEPOS is in a covered Part A stay in a SNF for a full month, Medicare will not make payment for the DMEPOS for that month. An example will help clarify the policy. A beneficiary rents a hospital bed beginning on January 1. On March 15, the patient enters a SNF and is discharged March 25. The DMERC will make payment for the entire month of March because the patient was at home on the anniversary date, March 1. The entire Program Memorandum is available at: www.cms.hhs.gov.

DMERCS Directed to Deny Claims without Written Order

   The Centers for Medicare and Medicaid Services has instructed the DMERCs to deny claims that arrive without written orders. This means that suppliers must have a faxed, photocopied, electronic, or pen-and-ink signed order on record or the claim will be denied. Additionally, if a supplier bills for an item without first obtaining a written order for that item, the supplier will not be permitted to appeal the denied claim.

News from the Office of Inspector General (OIG)

   For the seventh year, the OIG released its annual review of Medicare fee-for-service claims (ie, "traditional" Medicare). The goal of this review is to estimate the number of fee-for-service payments made in 2002 that did not comply with Medicare laws and regulations. The Centers for Medicare and Medicaid Services made $212.7 billion fee-for-service payments last year, and the OIG estimates that 6.3% ($13.3 billion) were improper. These improper payments could represent reimbursement for services provided but inadequately documented, inadvertent mistakes, or outright fraud and abuse. This is a significant improvement over the 13.8% ($23.2 billion) estimated in 1996 and is the same rate of error as 2001. The CMS attributes this improvement to their continued vigilance, the development of corrective action plans, and extending fraud and abuse initiatives. The OIG reminds providers to maintain adequate documentation supporting billed services, to bill only for services that are medically necessary, and to properly code their claims. The complete report can be viewed at: www.oig.hhs.gov.

   In another report published in late January, the OIG evaluated nursing home compliance with federal requirements pertaining to quality assessment (QA) and assurance committees. OBRA 87 required nursing homes to maintain QA committees that meet at least quarterly to identify and correct quality deficiencies and improve care. Whether nursing homes are meeting those requirements is determined through the survey and certification process. The report found that between 1997 to 2001, 99% of nursing homes met the requirements for QA committee membership and meeting frequency, 80% had seven or more members on their committees from several areas within the facility, and 61% met more frequently than required. The committees reported using CMS' quality indicators, certification survey results, and staff and resident input as sources of information to assess their care. More than half of the facilities reported that inadequate staffing and high turnover were barriers to having a more effective QA committee. The full report is available at: www.oig.hhs.gov.

MedPAC Releases Recommendations for Home Care

   The Medicare Payment Advisory Committee (MedPAC) is an independent federal body that advises Congress on issues affecting Medicare. Even though Congress relies on MedPAC guidance, the committee's recommendations cannot become law unless Congress passes legislation in which the recommendations are included. The committee released its most current report on January 16, 2003 that included recommendations for funding cuts not only for home health care, but also for skilled nursing.

   According to the American Association for Homecare (AAHomecare), in addition to asserting that home health agencies can achieve a 20% profit under PPS, and in addition to the funding cuts included in the Balanced Budget Act of 1997 (BBA 97), MedPAC's recommendations for home health include:
   * eliminating the market basket update to payment rates for FY 2004
   * providing a 1-year extension in the rural add-on in the amount of 5% for home care services provided to beneficiaries in rural areas
   * requiring a study on Medicare beneficiaries' access to home health service.

   According to a AAHomecare-funded report, approximately 1 million Medicare beneficiaries have been eliminated from the home health benefit since 1997 and the volume of Medicare participating home care providers has been cut by 40%. AAHomecare is calling for "a period of stability to recover from the damage created by BBA '97." The full report is available at: www.aahomecare.org.