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NAMDRC legislative initiatives take shape


Two priorities of NAMDRC have moved into the formal congressional arena. The issues focus on access to pulmonary rehabilitation and CMS’s move to include home mechanical ventilation in competitive bidding.

Phil Porte, executive director, NAMDRC

Phil Porte

Pulmonary Rehabilitation – The Problem: One of the major concerns to CMS and Congress is the fact that different payment methodologies for the same service result in different payment amounts dependent upon the actual site of service. To address the phenomenon of hospitals purchasing certain physician practices to game the payment system, Congress included in the 2015 Budget Act a provision that would remove incentives for such hospital purchases by stating that new hospital outpatient services must be within 250 yards of the main hospital campus in order to receive payment based on the hospital outpatient prospective payment system methodology. If a hospital opens such services beyond that 250-yard threshold, the hospital would be reimbursed at the physician fee schedule amount for the same service. Likewise, if an off campus program moved its grandfathered location because of expansion, loss of lease, etc, the physician fee schedule would again kick in.

For pulmonary rehabilitation services, this is extremely problematic and is tying the hands of hospitals providing this service. The physician fee schedule payment for pulmonary rehabilitation is less than $30 for 1 hour of service, and it is, therefore, not surprising that the service is simply not provided in physician offices. In fact, Medicare data show that all physician specialties bill less than $1M for code G0424, and we believe that most of that is likely billing error. Pulmonologists bill less than $500K for code G0424, and putting that number in context, the entire Medicare program is approaching $700B in outlays.

Pulmonary Rehabilitation – The Solution: As a solution to this problem, HR 4838 has been introduced in the House of Representatives. There is no specific reference to pulmonary rehabilitation in the bill as our approach is based not only on substance but political considerations, as well. Using CMS’ own acknowledgment of “unintended consequences,” this legislation would exempt all CPT codes from the restrictions imposed by Section 603 of the 2015 Budget Act when the physician billings for that code are under $2M for the most recent year for which data are available. CMS has signaled to us that such a limitation would apply only to pulmonary and cardiac rehab services, but others may be affected, as well. By putting a dollar limit rather than identifying a specific service for such a “carve out,” it is a more politically viable approach.

Bills such as this rarely see the light of day; however, such provisions are often attached to larger, more substantive bills. For nearly 2 decades, the common legislative vehicle for such provisions is a larger Medicare bill, often including “must pass Medicare extender” provisions that are slated to expire on a particular date. Our goal is to include HR 4838 in such a package of extenders some time between now and the end of this Congress in 2020.

Home Mechanical Ventilation – The Problem: CMS has proposed inclusion of home mechanical ventilation in competitive bidding for durable medical equipment. Such a regulatory proposal is fraught with downside risk, most notably that such a policy would follow the history of liquid oxygen. Liquid 02 has virtually disappeared from the marketplace since it was included in competitive bidding as suppliers simply refused to provide liquid oxygen systems as their own bidding dropped the price to prohibitively low levels. Also, because there is a statutory requirement that such payment be made on the basis of “frequent and substantial servicing,” and that stipulation could trigger wide variations in actual bidding because some states require involvement of respiratory therapists in such services, while others do not.

It is critical to understand that the driving force behind all of this is the reality that CMS’ own coverage policies for home mechanical ventilation are seriously flawed and outdated, creating perverse incentives for physicians to order easily accessible systems rather than clinically appropriate ones. NAMDRC and its sister societies have been pushing CMS to revise those policies with no success.

Home Mechanical Ventilation – The Solution: Our solution is twofold. HR 4945 bill was introduced on November 1, 2019. First, the proposed legislation would create a blanket exemption for home mechanical ventilation from competitive bidding. Second, it requires CMS to convene a technical expert panel to craft up-to-date policies for home mechanical ventilation.

The political strategy here is slightly different. While passage of the bill is certainly our first choice, we believe that introduction of the bill is a red flag signal to CMS for the need to revise its coverage policies as those policies are the root cause of the growth of home mechanical ventilation outlays.

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