Clarification of the Definition of Routinely Purchased Durable Medical Equipment (DME)

CMS is seeking comments on the effective date(s) for reclassifying items previously classified as routinely purchased equipment to the capped rental payment class in order to be in compliance with current regulations. While some items may be included in the Round 2 and/or Round 1 Recompete phases of the competitive bidding program, CMS do not believe they can change the classification for items furnished under these programs until the contracts awarded based on these competitions expire on July 1, 2016, and January 1, 2017, respectively, regardless of whether the item is provided in an area subject to competitive bidding or not. CMS propose that the reclassification of items previously classified as routinely purchased equipment to the capped rental payment class be effective January 1, 2014, for all items that are not included in either a Round 2 or Round 1 Recompete competitive bidding program (CBP) established in accordance with §414.400. For any item currently under a Round 2 CBP, instead of a January 1, 2014, effective date CMS proposes July 1, 2016, for these reclassifications, which would apply to all items furnished in all areas of the country, with the exception of items furnished in a Round 1 Recompete CBP. For items furnished in a Round 1 Recompete CBP, CMS proposes an effective date of January 1, 2017, which would only apply to items furnished in the nine Round 1 Recompete areas. Therefore, CMS proposes to generally base the effect dates on when the competitive bidding programs end. To summarize, the proposed effective dates for the reclassifications of these items from the routinely purchased DME class to the capped rental DME class would be:

·        January 1, 2014, for items furnished in all areas of the country if the item is not included in Round 2 or Round 1 Recompete CBP;

·        July 1, 2016, for items furnished in all areas of the country if the item is included in a Round 2 CBP and not a Round 1 Recompete CBP and for items included in a Round 1 Recompete CBP but furnished in an area other than one of the 9 Round 1 Recompete areas; and

·        January 1, 2017, for items included in a Round 1 Recompete CBP and furnished in one of the nine Round 1 Recompete areas.

This implementation strategy would allow the item to be moved to the payment class for capped rental items at the same time in all areas of the country without disrupting CBPs currently underway. For Round 1 Recompete items furnished in nine areas of the country for the six-month period from July 1, 2016, thru December 31, 2016, Medicare payment would be on a capped rental basis in all parts of the country other than these nine areas. Alternatively, the effective date for the reclassifications could be January 1, 2014, for all items paid under the fee schedule. In other words, the reclassification would not affect payments for items furnished under the Round 2 or Round 1 Recompete CBPs in the respective CBAs until the contract entered into under these programs expire on July 1, 2016, and January 1, 2017, respectively. However, this alternative would result in an extensive two and a half year period from January 2014 through June 2016, where Medicare payment would be on a capped rental basis for the items in half of the country (non-competitive bidding areas) and on a purchase basis in the other half of the country (109 Round 2 and/or Round 1 Recompete competitive bidding areas). CMS believe that this bifurcation in payment classifications would create confusion and would be difficult to implement, and CMS is soliciting comments on this alternative implementation strategy.

CMS has identified approximately 80 HCPCS codes requiring reclassification from the inexpensive or routinely purchased DME payment class to the capped rental DME payment class. The codes are shown in Table 11 on page 134-136 of the proposed rule.

US Rehab wants to ensure our members that we are working with CRMC and NCART to help with recommendations on the comment period for this proposed change which has a deadline of August 30, 2013.

ESRP Proposed Rule HCPCS Code List.pdf

ESRD_PPS_ProposedRule.docx