REGION D DAC MEDICAL SUPPLIES TEAM POSITION PAPER
MEDICAL SUPPLIES
in the
HOME HEALTH PROSPECTIVE PAYMENT SYSTEM

Issue

Under the Consolidated Billing provisions of the Home Health Prospective Payment System, medical supplies used by Medicare beneficiaries under a home health or hospice plan of care are included in the Home Health Resource Grouping (HHRG) payment to the home health agency. As a result, Medicare beneficiaries are required to obtain medically necessary medical supplies from the home health agency during the period of time they are under their care. Many beneficiaries, however, seek to obtain medical supplies - in particular, non routine supplies such as ostomy supplies, urologicals, tracheostomy supplies and surgical dressings - from retail suppliers while under the service of a home health care agency. This often occurs because the beneficiary or their caregiver is unaware that Medicare requires these supplies be provided by the home health agency, or because the beneficiary has an emergency need for medical supplies and the retail supplier is the quickest source of supply.

Under Consolidated Billing, claims for medical supplies provided by a Medicare supplier to a beneficiary while they are under a home health or hospice plan of care are denied. It is the responsibility of the supplier to determine whether a beneficiary is or is not under the care of a home health agency prior to providing medical supplies to a beneficiary. Unfortunately, the mechanisms provided by the Centers for Medicare and Medicaid Services (CMS) to check on the eligibility status of the beneficiary are inadequate and often result in denied claims for suppliers and no effective recourse for recovery of lost payments.

Background

CMS has provided the ANSI X12N 270/71 inquiry process as the primary mechanism for suppliers to check on the eligibility status of Medicare beneficiaries. This EDI-based process is an efficient mechanism for determining whether a Medicare beneficiary is eligible to obtain medical supplies from a supplier if the information in the Medicare database is up-to-date. Regrettably, this is rarely the case for home health care beneficiaries. This is because home health agencies are permitted by CMS to take 12 months or longer to file a claim for a beneficiary they have under service. (As of September 2006, home health agency claims can be submitted back as far as October 2004.) As such, the Medicare Common Working File that serves as the data source for 270/271 queries may not accurately indicate whether a beneficiary is under home health or hospice service.

Since suppliers cannot rely on the accuracy of the ANSI 270/271 query, they often default to asking the beneficiary (or caregiver) themselves if they are currently enrolled in home health agency plan of care. In many cases, this too is unreliable as beneficiaries either do not know or fail to provide accurate information. This results in the sale of supplies to an ineligible beneficiary followed by a CO (contractual obligation) denial or recouped claim and an inability of the supplier to collect the cost of the supplies from the beneficiary.

CMS’ response to date to rectify this situation has focused on requiring suppliers to have "prior arrangements" with the home health agencies serving their customers. Prior arrangements are agreements between a home health provider and a supplier that provides a mechanism for a supplier to recoup his/her loss in the event medical supplies were sold to a beneficiary while under their care. Unfortunately, this remedy is inadequate since many suppliers service large geographic areas and/or have many home health agencies in their service area making it impossible to have prior arrangements with them all. In addition, even with prior arrangements in place, the mechanisms for a supplier to be notified in real time by contracted home health agencies about which beneficiaries are coming on and off service do not currently exist, are complex to develop, and would have to be created for each contracted agency.

Lastly, while suppliers have a vested interest in securing these types of agreements, there is no pressure on home health agencies to enter into them since the financial burden of a denied claim is on the supplier. As such, obtaining prior arrangements from home health providers is unrealistic.

Recommendation

The Region D DAC recommends, in the short term, that CMS issue a requirement that home health agencies and hospices update the Common Working File database with information on all beneficiaries under their care within 24 hours of coming on and off service. It further recommends CMS eliminate the requirement that suppliers obtain prior arrangements with home health agencies and hospices operating in their service areas.

The DAC also recommends CMS adopt either a modification to the Advance Beneficiary Notice (ABN) or create a new notice for suppliers to use with beneficiaries purchasing medical supplies. The new notice would inform beneficiaries that they may be liable for the payment of such items if the supplier’s claim is denied due to the beneficiary being under the plan of care of a home health agency or hospice at the time of purchase.

Longer term, the DAC recommends CMS consider the removal of non routine supplies from the Home Health PPS altogether. The Government Accountability Office (GAO) has weighed in on this matter previously at the request of Congress and issued a report in August 2003 titled "Medicare Home Health Payment: Non Routine Medical Supply Data Needed to Assess Payment Adjustments", Report #GAO-03-878. The DAC would welcome further discussion with CMS on this matter.

Submitted by:

John Kenney Mary Turner
Region D DAC Region D DAC
Chairman A-Team Leader: Medical Supplies
Phone (949) 716-8767 Phone (573) 472-3613
Email: neuroflexjk@aol.com Email: ebsmt@hotmail.com

This paper was supported by the voting members of the Region D DAC.

CC: DAC D Executive Committee
Lori Borelli, CMS
Jabal Chase, CMS
Dr. Pilley, Medical Director, IntegriGuard, Region D PSC
Janet Kirsch, Team Leader, Noridian, Region D DMEMAC

HH PPS position paper 110906.doc

 

November 8, 2006

Dear Ms. Bastinelli:

The Region D DAC is very appreciative of your reply to the Region D DAC Same or Similar White Paper. Same or similar denials (CO 18) have been identified by CMS as one of the most frequent denials of DMEPOS. This is a costly administrative Medicare beneficiary eligibility problem that ultimately has an adverse financial impact on suppliers, the Medicare Program, and beneficiaries. The Region D DAC believes that this problem can be resolved if there is a willingness by all parties to work together to seek an administrative solution. We do not believe that PHI restrictions on providing eligibility information to NSC approved suppliers would prevent the DME MAC’s from providing this information.

The CMS Manual System Publication 100-09; Medicare Contract Beneficiary and Provider Communications, Transmittal 16, CMS Change Request 5089 dated July 21, 2006 provides detailed instructions for the disclosure of protected health information (PHI) to Medicare providers. The effective date of this transmittal was October 1, 2006.

Section 30.1.1.1 provides the Contractors with the discretion about whether to offer some types of information through the IVR or CSR’s.

· "Contractors shall use, among other data, analysis and provider feedback to determine what to offer via the IVR. Contractors have the discretion to routinely release all elements or only release when requested.
· "Contractors shall use inquiry and rejected/denied claims analysis results to decide what elements to routinely release" (Routine Eligibility Elements).
· "The Contractor shall only release this information (eligibility information) to assist the provider in billing Medicare properly."
· #3 Optional Eligibility Elements: "Based on the Type of Provider and Type of Service Provided. Contractors shall use discretion in determining the type of information to be released to an inquirer; the contractor shall only release this information to assist the provider in billing Medicare properly."

Publication 100-09, Transmittal 16 appears to provide the Contractors with the discretion to disclose Medicare Part B beneficiary eligibility information to providers to assist the provider in billing Medicare properly. The Region D DAC interprets Pub 100-09 to allow the Contractor per CMS instructions to provide same or similar eligibility information at their discretion. Precedence for providing HCPCS specific eligibility information already exists for preventative services and for CMN / DIF HCPCS specific information before a claim is submitted.

The Contractor is instructed by the updated CMS Manual System Publication 100-09, Section 30.1.1.1 to use provider feedback and rejected / denied claim analysis results to determine what PHI eligibility information the Contractor should make available either through the IVR or Contractor CSR. The Region D DAC represents the Medicare Suppliers in the 17 states of Region D. The Same or Similar White Paper submitted to CMS has been unanimously approved by all 17 State Representatives to the Region D DAC. This issue has been a top priority for the Region D DAC for several years. If the Region D DAC qualifies as "provider feedback", we urgently request that the Contractors be instructed to begin work to make same or similar HCPCS code eligibility information available to providers as soon as possible.

Publication 100-09, Transmittal 16 also instructs the Contractors to "use inquiry and rejected/denied claims analysis results to decide what (PHI) elements to routinely release" to providers. CMS’s own data suggests that same or similar claim denials (CO-18) are one of the most frequent reasons for claim denial. It is certainly the most frequent "avoidable" claim denial, as CMS has the necessary information available prior to claim submission that would verify whether a beneficiary had received same or similar equipment in the past and would be eligible for the ordered DMEPOS.

We are hopeful that CMS will agree with us that same or similar eligibility information is worthy of review and consideration by the Contractors to make this information available via the IVR or CSR. Since it is clear that the Contractor has the discretion whether or not to make this information available to the provider, we would appreciate that CMS support the Region D DAC as follows:

1.) formally inform the Contractors that based upon provider feedback and denied claim analysis, CMS recommends that the Contractor include in their work plan as soon as possible the capability to provide suppliers with same or similar specific HCPCS code information prior to claim submission to assist providers in billing Medicare properly, and
2.) That CMS receive from the Contractors estimated time table for implementation of same or similar eligibility information consistent with Pub 100-09, Transmittal 16.

In the interim of implementation of same or similar eligibility inquiry capabilities for providers through the Contractors, it is our understanding that providers should utilize the ABN when the beneficiary is unable to verify that they have not received same or similar equipment within the useful lifetime of the product being ordered by the physician.

We would welcome any opportunity to volunteer our best and brightest volunteers to work with CMS and the DME MAC’s to implement same or similar beneficiary eligibility provider communications. Should you have any questions or comments regarding this follow up to the Region D DAC Same or Similar White paper, feel free to contact me at (800) 652-1136.

Sincerely,

John Kenney
Region D DAC Chair

Region D DMERC Advisory Committee One Capitol Mall, Suite 320 Sacramento, CA 95814 Tel. (916) 444-3568 Fax (916) 444-7462 Website: www.dacd.org P OSITION P APER R EGARDING P ROPOSED NCPDP B ILLING F ORMAT F OR D RUGS B Y DMEPOS S UPPLIERS
January 16, 2003
The DMERC Region D Advisory Committee (Region D DAC) and several associated component advisory groups (Respiratory A-Team, I.V. A-Team, EDI A-Team, HME A-team) are vitally concerned about the implications of CMS Transmittal B-02-034 published May 2, 2002 and CMS Transmittal B-02-052 published 31 July, 2002 requiring the use of NCPDP Standard 5.1 and the equivalent Batch Standard Version 1.1 be used for all Retail Pharmacy Drug Transactions .
The Medicare Region D DMERC Advisory Committee (DAC) is a nonprofit volunteer organization comprised of HME providers, state and national associations, manufacturer supporters and industry consultants. The primary function of the DAC is to serve as a communications vehicle between the home medical equipment (HME) industry and CIGNA HealthCare Medicare Administration (CIGNA Medicare), the Region D DMERC.
As a result of these rulings, DMEPOS suppliers, home health care agencies/hospice agencies, hospitals and even physicians fall into the category of "retail pharmacies." As listed in Transmittal B-02-071 issued on October 25, 2002, "CMS considers any entity billing the DMERCs for a drug as a retail pharmacy." The designations and rulings are inconsistent with several existing precedents including but not limited to the Transaction and Coding Standards Rule issued on August 17, 2000 and Section 4119 of the Medicare Carrier’s Manual (MCM-60). Our observations of the inconsistencies and problems are listed as follows:
1. The rulings designate all DMEPOS suppliers as "Retail Pharmacies" ("any duly licensed entities that deliver pharmaceutical goods or services for sale to or use by the final consumer") and requires them to use Standard 5.1 to transmit these claims. This is overly burdensome to the supplier with duplication of billing practices and associated costs, as well as problematic to the DMERC carrier for adjudication and pricing of claims billed in NCPDP format versus ANSI X12N format.
2. Suppliers are required (MCM 60, Section 4119) to bill drugs, supplies and associated equipment on the same claim to the carrier. The use of two different Coding and Transaction Standards (ANSI X12N versus NCPDP 5.1) make this requirement essentially impossible.
3. The rulings designate that claims be submitted using NDC codes. Currently, claims submitted to the DMERC for drugs are submitted under HCPCS "J" codes. These different systems vary in terms of (1) not only requiring a crosswalk, but also requiring a conversion of billing units and (2) in the way that they are billed (Point of Purchase versus monthly billing associated with equipment ); while mandating that the carriers crosswalk NDC codes to J-Codes for payment and pricing purposes. A

significant number of NDC codes do not reference a specific HCPCS code consequently requiring the DMERC to use Not Otherwise Classified (NOC) coding without the further reference in the HAO record. ANSI X12N-837 was engineered to support either or both NDC codes or HCPCS codes allowing for the billing of both drugs and supplies/equipment on the same claim and in the same format. The requirement to use NCPDP doesn't address the variance in the quantities or values that are different and it doesn’t address the NOC code sets with clarification.
4. Medicare Secondary Payors are already required to operate under HIPAA and ANSI X12N-837. It is highly improbable that these secondary carriers will be able to process drug related claims under NCPDP format for our industry which is arduous to insurers and suppliers, and compromises care to the beneficiaries .
5. State Medicaid agencies will be substantially burdened to be compliant with two standards in claims administration in a time of budgetary shortfalls in States Medicaid agencies.
6. Obtaining the documents, code sets, and information necessary for billing under NCPDP 5.1 require membership in the NCPDP at a cost of $450.00. This requirement by CMS to participate in the membership of a specific non-profit agency in order to serve our beneficiaries violates several known tenants of CMS operations.

Based on the above problems, we argue that the rules that invoke the use of NCPDP Standard 5.1 and the Associated Batch Version 1.1 are onerous and appear to violate existing guidelines and precedents.
It is the unwavering position of the DMERC advisory committee based on the aforementioned points, that:
• CMS return to designations between "professional pharmacies" and "retail pharmacies" designating DMEPOS suppliers as "professional pharmacies" as referenced on the page 50331iii in the preamble August 2000 Transaction and Coding Sets rules.
• decision made last summer by the DSMOs to reject change request (CRS 574) which would have allowed professional pharmacy claims to be billed via the NCPDP format. Moreover, as the rules would offer good history for designation between different types of pharmacy operations, we would argue for exemption from the NCPDP requirement for those drugs billed by DMEPOS suppliers under the current HCPCS code sets. The billing of drugs by DMEPOS suppliers under the current system using HCPCS code sets via X12N-837 will be compliant with Administrative Simplification Compliance Act of December 2001 and the administrative simplification provisions of HIPAA.. It is also consistent with the
• Since ANSI X12N-837 is the designated standard and engineered to deal with the provisions and requirements necessary to complete billing by both (1) DMEPOS suppliers to the carriers and (2) secondary insurances , we argue in favor of limiting NCPDP 5.1 to only those retail drug transactions billed to carriers from specific retail pharmacies who deal in an over the counter setting to the public.

The Region D DAC urgently requests a response to this position paper, as it is imperative that changes be enacted in advance of any implementation.
Region D DAC
One Capitol Mall, Suite 320 �� Sacramento, CA 95814
Tel. (916) 444-3568 �� Fax (916) 444-7462