President's budget reins in DME spending

WASHINGTON - President Obama's fiscal year 2015 budget includes proposals to limit Medicaid spending on DME and to ramp up Medicare fraud efforts.

On Medicaid spending, the budget explains, “States have experienced challenges in preventing overpayments for DME. Starting in 2015, the budget would limit federal reimbursement for a state's Medicaid spending on certain DME services to what Medicare would have paid in the same state for the same services.”

This is the third year that Obama has tried to limit Medicaid spending on DME, according to The VGM Group.

The Office of Inspector General (OIG) has released a string of reports saying that state Medicaid programs could see significant savings by aligning their pricing with Medicare's, particularly its competitive bidding pricing. A report in January, for example, states that Medicaid programs could have saved 23%, or $62 million, if they paid the median competitive bidding rates for incontinence supplies in 2012.

The budget scores this proposal to save $3.135B over 10 years, from 2015-2024.

On fraud, the budget proposes requiring prior authorizations for power mobility devices and advanced imaging—a move that could be expanded to other items and services at high risk of fraud and abuse.

CMS in September 2012 launched a demonstration project in seven states requiring prior authorizations for power mobility devices. The agency reported in December that the demo reduced overall expenditures in those states from $12 million in September 2012 to $4 million in September 2013.

“We have almost a year and a half experience with the program,” AAHomecare stated. “We are working with CMS to make necessary changes and continue to advocate for improvements. However, the budget proposal is very vague, so it's unclear how it would be implemented.”

Also on fraud, the budget proposes modifying the documentation requirement for face-to-face encounters for DME claims. CMS is expected to start enforcing a face-to-face requirement for DME some time this year. The requirement went into effect July 1, 2013.

“The budget is not law,” VGM stated in a bulletin. “The House and Senate will play a key role in determining which or any of the provisions discussed above will actually be implemented.”