The shortage of independent diagnostic testing facilities (IDTFs) that will perform oxygen qualification tests for Medicare beneficiaries is becoming increasingly frustrating to many HME providers. The providers rely on the IDTFs for the tests their clients need to qualify for Medicare coverage of oxygen, but the IDTFs say Medicare reimbursement is too low for them to continue to do the testing. As a result, some IDTFs and HME providers are contemplating forming arrangements to resolve this access issue.

One proposed solution is for the HME provider to arrange for the testing facility to have a “testing day” at the provider’s location. By conducting tests on-site, the IDTF can more easily perform enough tests in a short period of time to make them profitable. In turn, the HME provider can get its clients qualified or requalified for oxygen coverage more easily.

Another proposed “win-win” solution is to have the HME supplier facilitate overnight pulse oximetry testing by providing delivery of the oximetry testing unit between the IDTF and the patient. The IDTF saves money by not having to arrange deliveries itself, and, again, the HME provider gets its clients tested more easily.

But are these arrangements legal? Yes, if you follow certain guidelines.

Both arrangements should meet with approval from the Durable Medical Equipment Regional Carriers (DMERCs), as long as they comply with the requirements set forth in various written guidelines. For IDTF on-site testing at an HME facility, the DMERCs require that the following conditions be met:

1) The tests must be performed by an IDTF that is enrolled as a provider with the local carrier in whose jurisdiction the test is performed.

2) The tests must be performed in compliance with, and be covered by, the local Medicare Part B carrier policy.

3) The test results must be downloaded by the IDTF and provided from the IDTF directly to the ordering physician. The February 2002 “Region B Council Questions and Answers” made this clear by stating that “It is permissible for a technician from an IDTF to perform oximetry testing on the physical premises of a DME supplier, if the tests are downloaded to the IDTF and faxed by the IDTF to the ordering physician.”

4) There are no payments or other remuneration between the IDTF and the HME supplier as part of the arrangement. This is important because section 4165 of the Centers for Medicare & Medicaid Services (CMS) carriers’ manual states specifically that oximetry tests performed by an HME provider or anyone financially associated with or related to an HME provider are unacceptable. Furthermore, any tests paid for by an HME provider are also unacceptable.

The requirements for the second solution—having the HME provider facilitate overnight pulse oximetry testing by providing delivery of the oximetry testing unit between the IDTF and patient—can be deduced by studying the requirements for IDTF overnight pulse oximetry testing and additional written guidance. As with on-site testing, there can be no payments or other remuneration flowing between the IDTF and the HME supplier, and the test must comply with and be covered by the local Part B carrier policy.

In addition, the test results must be downloaded by the IDTF and provided from the IDTF directly to the ordering physician. This means that an HME provider who delivered the sealed and tamper-proof pulse oximetry testing device to a patient’s home must deliver it back to the IDTF for downloading and faxing of the results to the physician.

Furthermore, keep in mind that for overnight pulse oximetry testing, the HME supplier is only facilitating the delivery/pickup of a preset, sealed, tamper-proof, overnight oximeter unit to or from the patient on behalf of the IDTF conducting the test. Also, the patient’s record must document that the oximeter is preset and self-sealed, and cannot be adjusted by the patient (or the HME provider). And, of course, any HME supplier or anyone financially associated with the HME supplier is prohibited from conducting the test.

In order to satisfy this last requirement, it is important that the HME supplier personnel used to deliver the oximetry testing equipment not be considered “non-physician personnel” performing the test. Rather, the IDTF personnel should be the ones performing the test. This extends to the IDTF providing instructions to the patient (possibly written instruction to be delivered by the HME provider with the equipment), being available to answer patient questions, interpreting the data and preparing of the data report, and performing any maintenance, calibration, etc, on the equipment.

Because the rules against payments or other remuneration flowing between IDTFs and HME providers are strict, HME companies must be careful when entering into any arrangement with an IDTF. However, solving the access problem for oxygen qualification tests is important to all concerned, including Medicare. Therefore, arrangements involving an IDTF conducting oximetry testing on-site at the HME provider’s location, or allowing the HME provider to supply delivery of overnight oximetry testing equipment between the IDTF and patient, have been presented to, and reviewed by, certain DMERC, Part B carriers, and CMS personnel. Based on their responses and other written guidance, an HME provider can legally facilitate oxygen qualification tests for its patients by structuring either of these IDTF arrangements in compliance with the requirements set forth in this article.

Lisa K. Smith, JD, is an attorney with the Health Care Group of Brown & Fortunato, PC, Amarillo, Tex. Contact her at (806) 345-6308 or lsmith@bf-law.com. 

Respiratory Insider

Ron Richard ResMed Inc, Poway, Calif, is 18th on Forbes’ annual list of the 200 Best Small Companies in America. Ron Richard, ResMed’s vice president of marketing, Americas, tells Dealer/Provider why he thinks his company has made the top 200 for the sixth year in a row. Q To what do you attribute ResMed’s recently reported record third quarter earnings? A New products with an exclamation point. We had one of our best Medtrades ever. The new Spirit™ and the new S7 Elite—in terms of what it can do for a dealer—really produce some excellent clinical results. The integration of the humidifier is compact and very easy to put together. The efficacy and compliance data that insurance companies and physicians are looking for are right there at their fingertips. We also launched another mask that will probably create a new benchmark in the industry. It is really focused on claustrophobic patients or patients who want to read before they go to bed. It has a good viewing angle, low mass on the face, and great comfort. It offers some advantages over and above what is on the market, and is a great extension to the existing Mirage family of masks. We are also gaining market share. We have a very skilled, highly trained group of people who are focused totally on selling ResMed products. We have had consistent management. Peter Furrell has been the CEO for ResMed for more than 13 years. He really sets the mission for the company, is an entrepreneur in the sleep market, and has a great vision for what is happening out there in the future. Q How do research and development play into the company’s larger corporate strategy? A We feel very strongly about investing in research and development. We probably invest at 2.5 to 3 times a higher rate than most of our competitors. And the proof is in our products. We truly are trying to develop high-quality products that meet or exceed the expectations of our patients. Q Do reimbursement concerns such as what patients need and what will be paid for figure into your research and development process? A It is becoming more important in terms of prior planning, but we also have a strong group of people who are working continuously in Washington, DC, and with various private pay organizations—showing them better compliance, efficacy, and outcomes with our devices to ensure better reimbursement for the patient and for the dealer. Part of the overall strategy is to look at current reimbursement, but we also look at the trends of what will happen with the sicker patients like the population of people who have sleep disorders but also have comorbidities such as cardiovascular disease, diabetes, or congestive heart failure. Q What new products or developments are slated for 2003? A The pipeline is pretty full. We did not have many new products over the last 18 months, and then this summer we started to roll out new platforms and product lines. There will be several new products slated for 2003, in both the mask and flow generator lines. We have certainly been busy, and people will soon see the fruits of our labor.