CMS Proposes Capped Rental Rule for DME

Far-reaching rule would move various DME over $150 allowable to capped rental

Remember the upheaval that ensued when standard power mobility lost its first month purchase option, and had to switch to a 13-month rental business model? Imagine that for the lion’s share of DME items with an allowable over $150.

The Centers for Medicare and Medicaid funding have proposed a rule to rent “routinely purchased” DME items falling under the three-year minimum lifetime requirement and that have allowables of more than $150.

Under the proposed rule, Medicare would only purchase an item outright if its statistics show that the agency purchased the item 75 percent or more of the time during the period of July 1986 through June 1987. If not, those items would be reimbursed on a 13-month capped rental basis.

CMS's stated reason for the proposal? Savings, of course.

 “We expect that the overall impact of reaffirming the definition of routinely purchased DME and our proposal for classifying certain expensive items as cap rental would be a decrease in expenditures because payment on a 13-month capped rental basis rather than a lump sum purchase basis for certain, very expensive items would lower total payments for these items and because many beneficiaries would not rent the items for as long as 13 months,” CMS wrote in the text of its proposed rule.

The proposed rule can be read in full at:!documentDetail;D=CMS-2013-0150-0002

As jaw-dropping as the proposed rule is for general DME categories, CMS's capped rental proposal gets downright surreal when it comes to complex rehab technology (CRT) — a segment of the power mobility market that worked overtime on Capitol Hill to ensure it was carved out of the 13-month rental transition for standard power mobility. The proposed rule could impact some complex rehab categories.

Rita Hostak, vice president of government relations for Sunrise Medical, said in an interview with HME Business's sister publication, Mobility Management, that CRT devices are once again suffering from being lumped together with DME.

She notes, for instance, that CMS cites eight months as the average rental time for DME - which is why the agency believes it can save money on CRT by renting equipment for eight months rather than paying outright for it.

“But they’re looking at standard equipment, and you can’t compare that,” Hostak points out. “You’re talking about people who may be in hospice; you’re talking about people that have had hip surgery and only need their wheelchairs until they’ve completed their rehab. You’re talking about elderly Medicare beneficiaries who are either dealing with an acute illness or possibly end-of-life sorts of stuff when you start talking about hospital beds and things like that.”

That’s not an accurate assessment of the group of beneficiaries using CRT, Hostak says.

“But when you’re talking about wheelchairs for people with permanent disabilities and pediatric wheelchairs, these people are not end of life,” she explains. “They’re not even sick! They just have a disability and need the technology to allow them to be more functional and independent. So I think [CMS’s] cost savings [predictions] are incredibly flawed.”

To read the full interview with Hostak, read “Industry Responds to CRT Capped-Rental Proposed Rule” on the Mobility Management website.

CMS is taking comments on the proposed rule until 5 p.m. Eastern time on Aug. 30, and providers are encouraged to provide feedback at the following link:!submitComment;D=CMS-2013-0150-0002

Instructions and guidelines on how to format comments and submit them can be found here:!faqs;qid=6-2

“I would encourage people not to panic,” Hostak cautioned. “We’ve got till the end of August, and then this isn’t scheduled to implement until Jan. 1. So I would encourage people, before they start trying to make any kinds of changes relative their systems or anything like that, to remember that this is just a proposed rule. Like anything else, this can change.

“The other thing is to contact their members of Congress,” she also said. “We’re hoping to get a letter from Congress to CMS, so if people would reach out to their members of Congress to say, ‘This is going to really be a problem for suppliers as well as people with disabilities, and we’d like your support.’ That would be helpful. And if people want to write their own comments, they can certainly do that too.”

About the Authors

David Kopf is the Publisher and Executive Editor of HME Business and DME Pharmacy magazines. Follow him on Twitter at @postacutenews.

Laurie Watanabe is the editor of Mobility Management. She can be reached at


Fri, Aug 2, 2013 Marc S. ATP Reading Pa.

Lets all start looking for work now! The industry can't survive the current funding models and audits... how are we going to handle this potential cash flow nightmare??!!

Fri, Aug 2, 2013 Spider

why couldn't the person that dreamed this one up have been sequestered?

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