CMS Sets Final Dispensing Fees for Respiratory Meds
Medicare recently announced a $57 monthly and $80 quarterly dispensing fee for inhalation medications in 2005, providing clarity within the home respiratory industry about reimbursement of inhalation therapies. “The issuance of the dispensing fee number is definitely an indication that we have a working dialogue with CMS that has been reasonably nonexistent in past years,” says Tim Pontius, RRT, chairman of the American Association for Homecare.

Tim Pontius

The fee schedule was announced as part of the Medicare 2005 Physician Fee Schedule. The schedule represents an overall spending increase of 4%, from $53.1 billion in 2004 to $55.3 billion in 2005, says CMS Administrator Mark McClellan.

Earlier this year, AAHomecare commissioned a study by Muse and Associates of 109 pharmacies. The study found that the 2005 Medicare reimbursement formula would under-reimburse the actual cost of providing two key drug therapies by $68.10 per monthly supply. AAHomecare shared information with the GAO and CMS about the patient-management, pharmacy, compounding, delivery, and administrative costs of providing these drug therapies and argued the therapies cannot be provided to Medicare patients at the ASP formula without a substantial dispensing fee. “We believe the Muse Study was as credible as any documentation we have seen, and it clearly pointed out that the dispensing fee needed to be $68.10 to allow the suppliers (on average) a mere 7% profit margin,” Pontius says. “The $57 number is at the low end of the spectrum identified by the GAO report, and as such, it means that many companies that currently provide respiratory medications will still be forced to give up that business. Should we consider this a victory?”Pontius asks. “In the immediate sense, it is a tremendous win for the industry. In a global sense, it is a moral victory at best.”

In comments on the costs of dispensing nebulized drug therapies to Medicare patients, CMS noted differences in the October 12 GAO report versus AAHomecare’s study, conducted by Muse and Associates, and concluded that CMS needs to understand the reasons for the variability in costs. CMS pledged to work with AAHomecare and others and will revisit the issue for 2006 fees.

Kay Cox

AAHomecare commended CMS and GAO for recommending adjustments. “Patients, providers, and the entire home care community will breathe easier with this important dispensing fee,” says Kay Cox, president and CEO of AAHomecare. “AAHomecare and its members have worked very closely with both GAO and CMS to make a case for this dispensing fee, and we are grateful for their willingness to review the issue. Reimbursement for inhalation therapy will continue to be a concern for AAHomecare, and we will continue to make sure reimbursements are adequate and fair.”

SADMERC Spells Relief for Custom-Molded Cushions
In an announcement made by Doran Edwards, MD, medical director of statistical analysis durable medical equipment regional carrier (SADMERC), fees for custom-molded seat and back wheelchairs codes K0558 and K0666 (HCPCS) will now be reimbursed under individual consideration.

The decision was made after AAHomecare’s Rehab and Assistive Technology Council (RATC) submitted a letter to CMS explaining why the allowables for these codes were inadequate.

RATC and its industry partners are pleased with the announcement and look forward to resolving other wheelchair seating policy issues.

Sen Blanche Lincoln (D-Ark) Sen Mike Crapo (R-Idaho) Home Care Champs in Congress and Administration Are Largely Unchanged The 2004 election provided Republicans with greater majorities in Congress, but most of the key players are unchanged going into a second Bush Administration and the 109th Congress. Senator Blanche Lincoln won with 56% of the vote, and Senator Mike Crapo won with 99%. “We’re happy to have home care champions returning to Congress, and we look forward to finding additional champions for a full range of home health and DME issues,” AAHomecare President and CEO Kay Cox says. “Of course, we are still pushing for HR 4491 cosponsors until the close of the 108th session later this month."

DMERC Should Be Liable for Failing To Detect Fraud, Lawsuit Says
Currently involved in a fraud case, All-Med Billing Corp recently filed a complaint against Palmetto GBA, which administers the region C DMERC, stating the Medicare carrier should share liability for failing to detect fraud.

All-Med Billing Corp allegedly filed false claims on behalf of dozens of DME companies for goods and services not rendered between January and June, according to a preliminary injunction order the government filed to freeze the billing company's assets. According to the order, Medicare paid the DME companies $122 million, of which All-Med received $7 million in commissions. Claims included orders for prosthetics, colostomy bags, and sleep therapy equipment.

In a footnote in the injunction order, Judge Cecilia Altonaga of the US District Court for the Southern District of Florida, wrote: “The Court observes that the wealth and effect of the overwhelming evidence of the fraudulent submission of claims to Medicare would have been equally apparent to Palmetto GBA as it was to this Court, if not more so, given Palmetto GBA’s obligations as fiscal agent in authorizing millions of dollars in payment. It is unclear why Palmetto GBA is not a subject of the Government’s investigation into criminal wrongdoing, in light of the overwhelming evidence covering months of losses in the millions.”

“In a way, the court invited us to bring Palmetto into the [third-party] suit,” All-Med’s attorney, Anthony Vitale of The Health Law Offices of Anthony C. Vitale, PA, in Miami says. He explained that the judge’s footnote in the injunction order against All-Med in part prompted the billing company to file a complaint against Palmetto.

“We believe this is the first time a Medicare carrier has been brought into a civil fraud case to either share or eliminate civil false claim liability,” he says.

“The claims in the third-party lawsuit are without merit. They're just not valid,” Palmetto GBA spokesperson Elizabeth Hammond says. “If All-Med and the other defendants are found liable to the US, it will be because they filed false claims. Palmetto cannot be liable to indemnify All-Med for that sort of activity.”

She added that “Palmetto GBA is assisting the government in prosecuting the original case the government filed.”

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