Ostomy fees in the bag

Tuesday, April 30, 2002

WASHINGTON — Providers are describing the recently released fees for the new ostomy codes as "generous," but they're describing the changes in billing they'll have to make to use those fees and codes as "time consuming."
"It's really a double-edged sword," said Patti Langenbach, president of the Jacksonville, Fla.-based Medical Care Products, which specializes in ostomy supplies.

Twenty new ostomy codes went into effect April 1. They include everything from non-pectin based paste (K0561) to flange-locking mechanisms for pouches (K080). Several days later, fees were released for the new codes, according Linda Aukett, chairwoman of government affairs for the Irvine, Calif.-based United Ostomy Association (UOA).

Industry sources say the new fees represent sizeable increases. For some codes, it's $1 or more. That's big news, especially when it was feared the DMERCs would only increase the fees by pennies, industry sources say.

"What we're thinking is, 'Hooray!'" said Aukett, who has worked with the DMERCs to develop the fees. "Things will improve for ostomy providers, no doubt about it."
For instance, for a drainable pouch with a standard-wear barrier (K0568), reimbursement has increased from $2.57 to $3.74, or $1.17.

The UOA hopes the increase in fees encourages more providers to take assignment on ostomy supplies, which would save beneficiaries from having to pay for the supplies out of pocket. Moreover, it hopes the increase freezes the mass exodus of HME suppliers out of the ostomy supplies business.

"That was our overall objective from the start," Aukett said. "It's still early, but I think this increase is a big step toward providers taking assignment for ostomy supplies. They'll be better able to cover the cost of them now."

Langenbach agreed. Medical Care products already takes assignment on 95% of ostomy supplies, but the new codes and fees will allow it to take assignment on codes it hadn't taken assignment on before, like waterproof tape (K0573) and filters (K0574). For supplies the company has already been taking assignment for, but barely making a profit, like valves for draining urinary pouches (K0578), it'll get a "nice bonus."

But Langenbach dampened the hype with the following warning: "Yes, I think it's an improvement for those of us who specialize in ostomy. Do I think your HME supplier is thinking, 'Oh, let's do ostomy now!'? No. I don't think there's going to be a huge turnaround."

Langenbach said a big reason for that is billing.
Many of the changes made to the ostomy codes involved breaking down existing codes. Paste, for instance, was formerly A4370, but now it's K0561 or K0562, depending on whether it's non-pectin based or pectin-based, respectively. Those breakdowns are what made many of the fee increases possible, but they also mean suppliers will have to adjust their software programs to handle claims with multiple lines.

"Where we once used to do one-page invoices, we'll now be doing three-page invoices," Langenbach said. "We're going to do it. We'll do whatever it takes. I just don't see people working that hard for pennies. Well, a little more than that now." HME