The management of chronic conditions is coming under increasing pressure in today’s climate of insurance reform. As insurance companies and legislators seek to curb spending and fraud within the medical equipment industry, medical equipment suppliers are caught in the middle of meeting clinical guidelines and getting reimbursed for products and services rendered.

Within the diabetes industry, Medicare regulations are frequently looked at as the standard by which other insurance organizations set their reimbursement criteria. Given that, recent changes by the Medicare Modern-ization Act (MMA) have brought increasing pressures within the industry, which (in the quest for less spending) are forcing compromises in the service and quality of products available to beneficiaries.

Previously, coverage of testing supplies for diabetes self-management was paid if: 1) the patient had diabetes (ICD-9 codes 250.00 to 250.93) that was being treated by a physician; 2) the glucose monitor and related accessories and supplies had been ordered by the treating physician, and the treating physician maintained records reflecting the care provided—including, but not limited to, evidence of medical necessity for the prescribed frequency of testing; 3) the patient (or caregiver) had successfully completed training or was scheduled to begin training in use of the monitor, test strips, and lancing devices; 4) the patient (or care-giver) is capable of using the test results to assure the patient’s appropriate glycemic control; and 5) the device was designed for home use.

Historically, a supplier was able to demonstrate compliance with the first two of these criteria through a certificate of medical necessity (CMN) signed by a covering physician. The physician was expected to provide training to the patient (or caregiver) for the equipment and become knowledgeable on the available glucose monitoring products to ensure appropriateness for home use. By the most simple of definitions, a DME supplier need only provide the product to the client upon receipt of the CMN.

The Here and Now
Health care providers are facing increased pressure to see more patients daily and spending only the briefest time with each client. With a diabetes diagnosis, topics for discussion in one visit can range from an explanation of the disease, medication options, diet/nutrition, exercise, and comorbidities. Given the complex nature of this disease, the time allotted for this visit is often not enough to cover any great detail or training on the proper use of diabetes testing equipment.

Kathleen Belmonte

We at Neighborhood Diabetes offer free in-home training on glucose monitoring equipment as a supplement to our services. While this offering is costly to the organization, it creates an opportunity to build stronger partnerships with the referring health care providers and strengthens relationships with clients.

It has been our experience that a large number of clients, particularly those in the Medicare generation, have a low comfort level with testing equipment after leaving their physician’s office. The opportunity to learn in the comfort of their own home is an invaluable service, which has led to stronger compliance with prescribed testing regimens than demonstrated in the general diabetic population.

Jennifer Delphia

In January 2005, as part of the MMA, Medicare made reimbursement cuts of 4% on blood glucose test strips and 5% on lancets. On an already slim margin, providing value-added services to the Medicare clientele—those who are most in need—has become increasingly difficult. Additionally, given acquisition costs of products, downward pressure on reimbursement rates has led to the narrowing of equipment choices for Medicare beneficiaries. Given the varying needs of each client (dexterity issues, vision impairment, cognitive impairment), a greater selection of glucose testing products for each person is far more beneficial in encouraging compliance with prescribed testing and, therefore, better health outcomes.

In the diabetes industry, a more recent trend on the part of Medicare DMERC Region A has been the enforcement of testing guidelines. These basic utilization guidelines, as set forth in the Tricenturion Local Medical Review Policy, state that non-insulin dependent individuals with diabetes (NIDDM) may not test their blood sugar more than one time per day. Insulin-dependent individuals with diabetes (IDDM) may not test more than three times per day. If individuals are testing outside of these guidelines, additional documentation is required from both the person with diabetes and the treating physician. This requires that the supplier expend additional time and resources to contact both of these individuals to retrieve the required data.

This additional documentation requires that a supplier provide information to Medicare that has heretofore been shared in protected confidence between provider and patient. Our experience at Neighborhood Diabetes is that both physicians and clients are reluctant to provide that information or documentation to organizations they perceive to be outside of that confidential relationship. This requires that suppliers become both educators about the changing demands of insurance organizations and enforcers of testing guidelines to clinical referral sources. Should either party refuse to provide the required information and documentation, the supplier is left no choice but to deny prescribed services above CMS utilization guidelines.

Shortsighted Policies
From a larger perspective, it is understandable that insurance companies, legislators, and employers are seeking to drive down costs and eliminate fraud as quickly as possible. However, this cannot be done without first understanding the nature of the chronic disease state. Research has shown that tighter control of diabetes leads to a reduction in the complications associated with the illness (nerve, kidney, and eye disease). Additionally, this leads to a reduction in the incidence of hospitalizations for the disease and related comorbidities, and thus a reduction in overall costs to the health care system. But if you look at cost reduction solely from providing product, you do not effectively reduce overall spending on chronic conditions.

Eliminating spending on the front end of a disease will initially bring down costs to the health care system, but will eventually lead to an exponential increase in spending down the road. Many of the implications of these medical cuts may be invisible at first as equipment prescriptions go unfilled. But soon the cost of putting off or reducing self-management will show up in emergency departments. As hospitalizations for amputations, end-stage renal disease (ESRD), heart disease, and other conditions increase exponentially, our health care system will be burdened far more than in its current state.

Education pays
The solution to economic reform within health care is neither an arbitrary cap on reimbursement rates nor the establishment of product limits. Instead, a mechanism must be found to better educate individuals on self-management of their disease. Medical equipment suppliers have a unique opportunity to review and report on utilization and compliance rates through the monitoring of purchasing behavior of clients. Additionally, suppliers (who are required by CMS to get permission from the individual prior to shipping product) frequently have as much or more contact than physician offices—and have multiple resources for communicating with clients. A stronger working relationship between health care providers, clients, and suppliers can be a valuable tool for achieving better health outcomes and minimizing overall health care spending.

Kathleen Belmonte, MS, RN-CS, CDE, is vice president of clinical services for the Neighborhood Diabetes Shoppe, Wakefield, Mass, and Hampton, NH. She can be reached via e-mail: kbelmonte@sugartest.com. Jennier Delphia, MBA, is vice president of client services for the Neighborhood Diabetes Shoppe.