In today’s competitive market, many hme suppliers have turned to aggressive marketing in order to increase their bottom lines. A prime example of this is what is happening with power-operated vehicles (POVs or scooters), which are now marketed directly to beneficiaries via television advertising, direct mail campaigns, and the Internet. Advertisements depict older Americans enjoying life in outdoor settings because of the freedom and convenience that a POV can offer. These aggressive marketing techniques, combined with an aging American population that wants the ease and convenience that scooters offer, can translate into big dollars for an HME supplier.

However, although POVs are a profitable business line, Medicare’s medical necessity requirements pose significant limitations. For any item to be covered by Medicare, it must:

1. Be eligible for a defined benefit category.
2. Be reasonable and necessary for the diagnosis or treatment of illness or injury, or to improve the functioning of a malformed body member.
3. Meet all other applicable Medicare statutory and regulatory requirements.

New Rules Change Reimbursement
Whether the provision of a POV is reasonable and necessary is defined by the Regional Medical Policy for POVs. This policy was recently revised and new requirements were added that go into effect for dates of service on and after January 1, 2002.

The revised policy provides that a POV will be covered only when all of the following five criteria are met:

1. The patient’s condition is such that without the use of a wheelchair the patient would be unable to move around in their residence.
2. The patient is unable to operate a manual wheelchair.
3. The patient is capable of safely operating the controls for the POV.
4. The patient can transfer safely in and out of the POV and has adequate trunk stability to be able to safely ride in the POV.
5. It is ordered by a physician who specializes in either physical medicine, orthopedic surgery, neurology, or rheumatology.

Prior to the revisions, the language of the first requirement read “the patient’s condition is such that a wheelchair is required for the patient to get around in the home.” This change is subtle but it makes clear that a beneficiary who does not require a POV for in-home use will not qualify.

POVs are often ordered as convenience items to allow an individual to perform leisure or recreational activities. However, POVs ordered for individuals who are capable of ambulation in the home but require assistance outside the home are medically unnecessary and will be denied.

Record Keeping is Key
In addition to the medical necessity requirements, a supplier is required to maintain specific documentation in order to be reimbursed for a POV. These documentation requirements include a written order prior to delivery and a Certificate of Medical Necessity (CMN). A properly completed CMN received prior to the delivery of a POV may serve as the written order. In addition, if a POV is ordered by a physician who does not practice in physical medicine, orthopedic surgery, neurology, or rheumatology, additional documentation that clearly describes the special circumstances that allow the physician to order the POV must be sent in with the CMN.

The revised POV policy greatly increases the documentation requirements for DME suppliers. Specifically, the revised policy added the following language:

“For an item to be considered for coverage and payment by Medicare, the information submitted by the supplier must be corroborated by documentation in the patient’s medical records that Medicare coverage criteria have been met. The patient’s medical records include the physician’s office records, hospital records, nursing home records, home health agency records, records from other healthcare professionals, and test reports. This documentation must be made available to the DMERC [Durable Medical Equipment Regional Carrier] upon request.”

This change in the revised policy is consistent with the DMERCs’ postpayment review process. Generally, a postpayment review and request for documentation will require the DME supplier to provide copies of the patient’s medical records.

In light of the changes to the revised policy, it is a good business decision to obtain copies of a patient’s medical records prior to delivering the POV to the patient. Review the records to ensure that they document the medical necessity of the POV. If the medical records do not support medical necessity, discuss this with the patient and obtain a waiver of liability prior to delivery. This will allow you to bill the beneficiary in the event the claim for the POV is denied by the DMERC.

Plan Ahead to Avoid DMERC Audits
The DMERCs are actively auditing suppliers and seeking overpayments from those who lack the appropriate documentation. Although the revised policy does not state that suppliers must have their documentation in their files prior to dispensing the POVs, those who do not have this documentation in their possession are risking overpayment requests.

In most audits, the supplier is given a very short period of time in which to respond. In addition, physicians are often unresponsive to requests for documentation. This lack of time to respond and lack of cooperation from physicians will usually result in an overpayment. The advantages to obtaining this documentation early include (1) physicians are often more cooperative when the patient is waiting for a product and (2) a supplier is in a better position to evaluate the medical necessity of a patient prior to dispensing a POV.

POVs are becoming more popular because they can help an increasing number of people who have difficulty walking, but who want to avoid the social stigma attached to being confined in a wheelchair. Because of this increasing demand, POVs can be a significant revenue center for suppliers that follow the strict regulations governing POVs. However, suppliers that are providing scooters for reasons other than medical necessity will find that meeting the POV policy requirements will be difficult.

Denise M. Fletcher, JD, is an attorney with the Health Care Group of Brown & Fortunato, PC, Amarillo, Tex. She represents HME companies and other health care providers and can be reached at (806) 345-6318 or dfletcher@bf-law.com.