[emiller]

I was wondering on Medicare covered items such as Bedside Commodes, Walkers, etc do all of you know about the proposed rule (68 FR 53939) that states "An HME supplier's usual charge should not be less than 83 percent of the Medicare fee schedule amount." If so do all of you sell for example a bedside commode for $93.00? Just wanting to try to find more information on this rule.

[ggroden]

Unless you are in an extremely competitive area, I always looked to cash
sales of these products to be profitable with a retail approximately 20%
higher than the Medicare allowable. If you sell below the Medicare
allowable, that is the price you have to sell to Medicare. Joe Groden

[john@valshoes.com]

"If more than 20% below Medicare's fee, you have to sell it to Medicare at this lower price". Show us in the Medicare manual where it states that, please. Chapter, section, page appreciated.

[ggroden]

The requirement applies to selling regular retail for any price below
Medicare allowable not just 20% and you then have to bill Medicare this
price. I am now a HME Consultant and do not have a Medicare manual to refer
to, however if you belong to VGM, Peggy Walker can verify this or other HME
billing consultants can as well. Joe Groden

[RJ Domos]

I see this question was asked a long time ago, but it is one of the more common questions I get as a consultant, so I thought I would go ahead and answer it anyway.

The rule is found in the Medicare Program Integrity Manual. The section you are looking for is 4.22.3.

Unfortunately it is so vague as to give no real guidance whatsoever to the original poster's question.


Around about 2003 the OIG started making noises about Medicare not getting the best price (and we all know there are lots of fee schedules below the Medicare fee schedule -- even as pertain to other governmental payers such as the VA). They eventually proposed a rule that would limit the amount of the discount you could provide, on a cash basis for Medicare covered items, or to other payers, to be no more than 17% below to the Medicare fees.

However, the rule was never finalized... because, as the OIG stated there are too many variables to make a hard and fast rule. Amazing that the OIG got something right for a change, isn't it?

Even though the proposed rule didn't discuss variables specific to the DME business and retail operations, it's not hard to think of what those are: the costs of intake, documentation, and reimbursement processes; the cost of basically financing your capped rental products to Medicare beneficiaries interest free for 13 months; costs associated with accreditation requirements, and on and on. None of these costs are inherent in selling a commode or wheelchair to someone for cash.


Full disclosure, if you talk to a DME lawyer, whose job it is to give you advice that keeps you bullet proof, they will tell you to stick to the 17% rule because it was discussed as the reasonable amount you can discount something below the Medicare fee schedule (in the proposed rule) without having to also give Medicare that price.



My advice to my clients is to understand the rules, and take the proposed but never finalized rule into account when setting the cash price for DME items normally covered by Medicare. Each provider needs to make their own decision.

I will say, I have seen CMS come after a lot of providers for a lot of things, but never on this issue.


Roberta Domos
http://hmeconsulting.com
http://hmebillers.com