Infusion update: Heated surety bond battles continue in Washington, DC
Infusion update: Heated surety bond battles continue in Washington, DC
`If you have a pump, that's DME'
With a slew of changes approaching for home infusion providers in the near and long-term future, it appears at least some of the developments on Capitol Hill will leave you and your peers guessing up to the last minute.
Developments likely to have the most immediate impact surround the recent surety bond requirements issued by the Health Care Financing Administration (HCFA) for home health agencies and durable medical equipment (DME ) providers. (See Home Infusion Management, March 1998, p. 13.) If you think you had all the answers for your agency, don't be so sure. HCFA plans to make technical revisions to the requirements and publish them in the Federal Register with a 30-day comment period.
In a recent letter to Congress, Nancy-Ann Min DeParle, HCFA administrator, noted that the agency plans to publish the Federal Register notice shortly. The notice, along with the original regulation published Jan. 5, will form the basis for a final rule. However, the good news is that home health agencies unable to acquire a surety bond by the previous Feb. 27 deadline will have some breathing room.
"Given the scope of possible changes that could be made in the regulations, home health agencies will be given 60 days from the date the final regulation is published to submit a surety bond," according to DeParle's letter.
However, what changes are in store for both the home health and DME surety bond regs is anyone's guess.
"HCFA keeps meeting with the surety bond people," says Tim Redmon, the director of regulatory affairs for the National Home Infusion Association in Alexandria, VA. "They said they're going to loosen the restrictions on the home health side and strengthen the DME side, but we haven't seen that yet, and we don't know when that's going to come out."
Redmon expects the gap to narrow between the stringent home health requirements and the fairly lax DME requirements.
"I think they're going to try and make both of them the same, but I don't know what they're going to add to the DME or take away from the home health," he says. "Whatever they take out of the home health I don't expect to appear in the DME requirements."
For now, Medicare-certified providers having to acquire a surety bond for the home health requirement are finding many surety bond companies unwilling to issue the bonds due to HCFA's strict requirements. While DME companies aren't faced with the same requirements - and therefore aren't having as difficult a time acquiring surety bonds - Redmon notes that some providers are unclear how the requirements affect them.
"The problem is that some people don't understand the [Medicare] benefit and ask if it applies to them because they do infusion and they're not DME," notes Redmon. "But if you have a pump, that's DME."
Inherent reasonableness
HCFA also has issued an interim final rule to implement inherent reasonableness within the interim payment system (IPS), and it doesn't look good. According to Alan Parver, JD, president of the Washington, DC-based National Alliance for Infusion Therapy (NAIT), HCFA intends to pass along the inherent reasonableness authority.
"It appears that HCFA is delegating to the DMERCS [Durable Medical Equipment Regional Carriers] the inherent reasonableness function," he says, which would allow DMERCs to reduce or increase payment for a product as much as 15% or less annually.
"This is cause for a great deal of concern because there are very few rules about how this authority would be used," says Parver. "As long as the reduction is 15% or less annually and meets some of the general criteria that appeared in the rule, there does not seem to be any other objective criteria the inherent reasonableness reduction would have to meet.
"Also, if the DMERCs are aggressive in this area, there are not a lot of criteria or standards in the regulation or statute which support an appeal," he adds.
Redmon agrees and notes that it wouldn't take long for a DMERC to cut reimbursement for some products in half.
"They can take up to 15% per year on any particular item, so we could move down pretty quickly to 45% off any particular item in just three years," he says.
The NAIT has several additional problems with the interim final rule:
· Improper use of the interim final rule.
"Rather than using the final rule as a way to implement inherent reasonableness, we think proper procedure would be to do a full notice and comment on this rule," says Parver.
He adds that the rule is scheduled to take effect the same day the comment period closes.
· Failure to study impact on small businesses.
"When there is a large impact on small businesses, HCFA is required to determine the impact on small business," notes Parver. "They decided not to do that, and we think they were in error in making that decision."
· Lack of clarity.
Lastly, Parver says the lack of specifics regarding how HCFA or the DMERC would qualify a product for cost reduction or increase - and the amount of any such change - is troubling.
"The regulation needs more detail," he says. "It doesn't spell out how the DMERC or HCFA can come to these conclusions that a payment level is grossly excessive."
Coming up
In the not-so-distant future, Redmon notes that any provider billing Medicare for services provided to nursing homes could be in for a rude awakening come July 1.
"Under the Balanced Budget Act, by July 1, 1998, HCFA must have consolidated billing in place for all nursing homes," he says. All suppliers who deliver care or products, such as parenterals and enterals, will no longer be able to bill Medicare for those services. Instead, the facility will bill Medicare directly.
While many nursing homes may have used several DME and home infusion providers for various services, those days are likely overcome July 1.
"Because the nursing home administrator is going to have a cap and a PPS [prospective payment system] and do the billing himself, instead of working with 12 providers, he's going to work with the one with the lowest cost," says Redmon, who says that such a system is ripe for fraud and abuse.
"What I'm really concerned about is you've given the administrator the ability to say to the one and only supplier that he's picked, `For all this business I'm sending your way, I want free Xerox machines,'" he says. "Whether they do this or not is another matter, but you've now got the potential for a fraud and abuse kickback situation."
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