Newsletter

February  2006

Volume 1, No 4
 

Thursday, January 26, 2006

Centers For Medicare And Medicaid Services

CMS Revised Payment Classification of Certain
Respiratory Assist Devices

Change Will Improve Payment Accuracy
And Reduce Beneficiary Costs
 

The cost of certain medical devices to help Medicare patients breathe will be reduced as a result of actions taken today by the Centers for Medicare & Medicaid Services (CMS). 

 Under a final rule issued today, certain respiratory assist devices (RADs) will no longer be considered durable medical equipment (DME) requiring frequent and substantial servicing for payment purposes, but will be reclassified as capped rental DME items effective April 1, 2006.  The rule applies to those RADs that have a backup rate feature that delivers air pressure whenever the user’s spontaneous breathing efforts are insufficient.  With this action, Medicare beneficiaries will be paying less out-of-pocket for the use of the equipment.

 Currently, beneficiaries must pay up to $128 per month in coinsurance for as long as the respiratory device is being used.  Under the new rule, that coinsurance amount will decrease to $96 a month, beginning with the fourth month of rental.  After 13 months of rental the beneficiary may take over ownership of the device and will no longer have to pay any coinsurance on the rental of the device. 

The Medicare program will also save under this rule, in that the monthly rental payments will be reduced with the fourth month of rental and will stop altogether after 13 months when title for the equipment transfers from the supplier to the beneficiary. 

Since 1992, RADs that have a backup rate feature have been paid by Medicare on a continuous monthly rental basis for as long as the beneficiary uses this device.  The Health and Human Services Inspector General found that the RADs do not require frequent service to justify continuous rental payments.  Under the new rule, beneficiaries using RADs may elect to take over ownership of the equipment after renting it for 13 months.  The rule also allows for a transition period for devices which are currently being rented to Medicare beneficiaries so that rental months paid prior to April 1, 2006 will not count toward the rental payment cap.

 “Medicare is committed to paying the right amount for the devices and equipment provided to its beneficiaries,” said CMS Administrator Mark B. McClellan, M.D., Ph.D.  “We are helping people with Medicare get the highest quality care and treatments at lower costs, ultimately lowering the costs for the Medicare programs.”

 RADs are used by patients who have difficulty breathing.  The RAD delivers variable levels of air pressure to help spontaneous respiratory efforts and supplement the volume of air in a patient’s lungs.  RADs with a back-up rate feature also deliver the air pressure whenever sufficient spontaneous inhalation fails to occur.  Maintaining a RAD generally requires replacing masks, changing filters, and other routine tasks, rather than the frequent and substantial servicing, which may include dismantling, cleaning and recalibrating equipment by skilled technicians.  Under the Medicare law, all RADs are excluded from the DME payment category that pays indefinite rental payments for items that require frequent and substantial servicing.  Medicare will continue to pay 80 percent and the beneficiary will pay 20 percent of the Medicare allowed payment amount for maintenance for the equipment after the rental payments ends.

 While other types of RADs have been paid correctly as capped rental devices, the RADs with a timed backup feature were incorrectly categorized and paid under the payment category for items that require frequent and substantial servicing.  As a result, both Medicare and the beneficiary have been liable for rental payments and copayments long after the total payments surpassed the purchase price of the device.  However, Medicare still pays more than cost for these devices. 

 This final rule, which will be published in the January 27, 2006 Federal Register, will apply to claims received on or after April 1, 2006.  In the cases where beneficiaries received these items prior to April 1, 2006, only the rental payments for months after the effective date will count toward the 13 month cap.

 Source:  http://www.cms.hhs.gov/apps/media/press/release.asp?Counter=1764

 

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CMS Announces Approval of New Technology Intraocular Lenses 

  Thursday, January 26, 2006

The Centers for Medicare & Medicaid Services (CMS) today announced the results of the 2005 review of applications for designation as New Technology Intraocular Lenses (NTIOLs) and approval of a new class of NTIOLs

In 2005, CMS received one request for NTIOL status from Advanced Medical Optics (AMO) Tecnis^® Models Z9000, Z9001, and ZA9003.  AMO provided data that the Tecnis^® IOL compensates for corneal spherical aberrations and improves vision.   CMS approved the Tecnis® request, thus creating a new class of NTIOLs, “Reduced Spherical Aberration.” 

 “Today’s announcement of coverage with additional payment for an innovative type of intraocular lens reflects Medicare’s attention to improved clinical benefits,” said CMS Administrator, Mark McClellan, MD, PhD. “For these lenses, there is clear evidence of improved functional vision and contrast acuity.”

 CMS has implemented an annual process under which interested parties may request a particular intraocular lens (IOL) be designated with “New Technology” status and become eligible for an additional $50 payment when provided to a Medicare beneficiary in an ambulatory surgical center.

This payment adjustment is valid for a 5-year period, beginning when CMS recognizes an IOL as the first IOL of a new class providing specific clinical advantages and superiority over existing IOLs.

 Since the NTIOL process began in 1999, two NTIOL classes have been approved.  These--NTIOL classes--multifocal corrective IOLs and toric (astigmatism correction)--were created in 2000 and expired in 2005.   The additional $50 NTIOL payment for these NTIOL classes stopped in May 2005.

 Notice of the action announced today went on display at the Office of the Federal Register on Jan. 25, 2006 for publication on Jan. 27, 2006.

Source:  http://www.cms.hhs.gov/apps/media/press/release.asp?Counter=1762 

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Summary

This state reimbursement plan enables States to be fully reimbursed for their efforts to help ensure that their beneficiaries eligible for Medicare and Medicaid have access to their covered Medicare drugs as they move to their new Medicare Part D drug coverage.   The plan also supports limiting the need for State reimbursement by supporting the use of Medicare payment systems whenever possible, and promotes the effective transition of dually eligible Medicare beneficiaries into their new Medicare coverage. 

Background

The Centers for Medicare & Medicaid Services (CMS) has taken numerous actions to ensure that full benefit dual eligibles, those eligible for both Medicare and Medicaid, continue to receive needed medications as they make the transition from Medicaid coverage of their drugs to coverage under the new Medicare Part D drug benefit.   CMS is committed to working with States to make the transition as seamless as possible for all dually eligible beneficiaries.

To ensure that the Medicare and Medicaid programs can respond expeditiously to the needs of the dual eligible beneficiaries, this state reimbursement plan will allow States that have assisted their dual eligible populations in obtaining and accessing Medicare Part D drug coverage to be reimbursed for their efforts.

In particular, the demonstration plan will permit Medicare payment to be made to States for amounts they have paid for a dual eligible’s Part D covered drugs, to the extent that those costs are not otherwise recoverable under Part D.   In addition to providing Medicare funds to reimburse amounts paid by States for Part D covered drugs, the demonstration would also provide payments for administrative costs incurred in the coordination of the drug benefit by State Medicaid programs.  CMS will establish a staff team to provide expedited review of applications of States applying for this demonstration.

 Purpose

To promote smooth transition to Part D for the subset of Medicare-Medicaid beneficiaries who have had difficulty and who are currently receiving assistance from a State, to minimize State costs, and to fully reimburse States for their costs.

This demonstration, to be administered under Section 402 Demonstration Authority, will evaluate whether timely and effective collaboration between a State and CMS can reduce overall Medicare expenditures by 1) promoting faster inclusion of affected dual eligible beneficiaries in their Part D plan, leading to more effective use of prescription drugs; and 2) promoting high-quality care for dual eligible beneficiaries, due to more effective coordination between Medicare and Medicaid coverage.  These steps are expected to lead to lower total Part D costs and lower Medicare and Medicaid expenditures.

 With input from the States through a workgroup that has been established, CMS will provide a template for use by those States which re-instituted some coverage through their Medicaid system for dual eligibles.  The template is expected to be available shortly and will be posted on the CMS Website.  Based on this process, CMS and affected states will develop a process for reconciling payments involving beneficiaries in State Pharmacy Assistance Programs (SPAPs) who were enrolled in Medicare Part D.

 Key Features

•   State Reimbursement:  States that meet the conditions of the waiver will have their full drug benefit costs reimbursed through (1) CMS assurance of payment reconciliation with the prescription drug plans and (2) Medicare payment of any net drug cost differential after reconciliation.  In addition, CMS will provide funding for administrative costs incurred by states.

•   Payer of Last Resort:  States will use payment approaches that support pharmacist efforts to primarily bill the Medicare Part D plan, and that promote the use of Medicare point-of-sale billing, before relying on State payment.  States will provide input to CMS and plans on ways to enhance plan and program performance for the state’s dual eligible beneficiaries and pharmacists, to help reduce State billing.

•   Timely Data Sharing:  States that participate will provide timely summary information on claims incurred, including summary amount and beneficiary identification information, to facilitate reconciliation and beneficiary transition to Part D plans.  States will also work with CMS to provide valid data on any set of beneficiaries who may not have been included properly in the State’s previous dual eligible files.

•   Claims Identification:  States will separate claims for the transition period from claims the States would have otherwise paid through a separate state program.  In some States, the State has elected to pay all cost sharing, for example, on behalf of some beneficiaries who would otherwise have paid a co-payment.

•   End Date:  This temporary demonstration program would have an anticipated end date of February 15, 2006.  Participating States would discontinue payments through their Medicaid systems on or before this date. The Secretary may provide a short-term extension of the demonstration program.

•   Retroactive Effective Date: The demonstration would be retroactive to the first date the state paid claims.