Why Care what Medicare Does?

Living in the United States, unless you are over 65 you probably do not care about what Medicare does. What may surprise you is that decisions that are made at CMS/Medicare affect what private insurer's and Medicaid does.  Private insurance uses what Medicare does on the Federal level as a guideline of what minimum services they need to offer.

CMS uses SADMERC, a group that determines coverage, and coding of all DME (Durable Medical Equipment). These codes are universally used by all insurance/funding groups.  Medicare establishes a fee schedule and longevity of each product code which is published.  Once a fee schedule is published it is accessible by all other insurance providers.

Generally private insurance PPO's use a formulary that offers higher fee's paid to service providers (Doctors, Clinicians, and Equipment Suppliers).  Private Insurance HMO's use a fee schedule closer to what Medicare offers. Medicare HMO's use a fee schedule lower than the Medicare fee schedule as they generally package other benefits into their program and uses the lower fee schedule to offset the additional benefits.

Presently in the DME industry, there are three (3) important battles shaping up......

Competitive Bidding

The First major issue is competitive bidding, which was introduced in 2010, and was trialed in 10 metropolitan areas. Although it hasn't been a total failure, it has caused a huge reduction in access. In the first year of 2010, almost 1/3 of the winning providers went out of business unable to perform under the agreed contract.  In 2012, the Scooter Store was closed down by the Government, and had contacts in all contact areas.  In 2012, the 2nd round of competitive bidding starts in July, if not stopped, will affect the entire United States.

What is Included in Competitive Bidding?
Most DME equipment including; wheelchairs, scooters, group 1 and group 2 powered wheelchairs, beds, mattresses, patient lifts, canes, walkers, oxygen and respiratory products and many other supplies.  Not one company won all the bids, so it is possible if you need multiple products, you may have different suppliers for each one.

Less providers equal less access. You know when you have a problem with FPL or ATT, that you are stuck. You cannot switch your business to another provider.  Once these companies are struggling and do not have adequate funding to survive, will they care about unsatisfied customers?  If they have limited reimbursements, less options, and less quality products and services will be offered. Since DME has a life expectancy of five (5) years, if the equipment is not as durable, will beneficiaries become stranded if the equipment is of less quality?

Further we have seen from what occurred with the Scooter Store, that beneficiaries of equipment have become stranded. It is not recommended to provide service to a customer whom you did not provide their equipment and do not have the supporting documentation in your files. As you will read shortly, in an audit from the initial company, if CMS/Medicare finds that the equipment was provided inappropriately, not only will the money for the equipment purchase be recouped, but also will any services provided for that equipment. When additional suppliers of DME disappear, their customers are severely disadvantaged and will most likely have to personally pay for services, or go back through the process gather medical documentation to support the need for their equipment.

Several economists have shown that this system will fail. A system where you force an industry to bid low or no longer be able to stay in business does not foster competition, it creates fear, and survival instinct. Many companies bid low, not because it was a sound business decision, but a way to keep their business alive. There are many in Congress that have been trying to stop Medicare/CMS from moving forward with the competitive bidding program; however Medicare/CMS continues to boast huge savings; overlooking the destruction of businesses, the loss of customer choice, and reduced access to equipment and service.

The Second major battle are the audits. If it were not bad enough that CMS/Medicare created competitive bidding, they also hired companies, bounty hunters, to audit DME companies to ensure that they were billing properly and to avoid fraud and abuse.  This is where it gets interesting....Most recognize fraud and/or abuse by the providing of equipment to people who do not need it or billing equipment that was not provided.  Medicare determined that if they reviewed a file, even if there was medical need, if a date was not proper, or a signature not clear, that the claim could be deemed improper and money can be recouped from the provider.  I say again, it is not because the patient did not need the equipment, they are looking for a technicality to reclaim money from the equipment supplier. They do not go after the Physician, or Clinician, but the supplier.  This has cause these bounty hunter companies to become aggressive- they get a percentage of money recouped, so it is to their benefit to find things wrong.  If they find claims wrong they can extrapolate back several years based on a percentage of claims found not be correct and demand money back.  It is up to the supplier then to hire an accountant and attorney to dispute this, in most cases the company declares bankruptcy. As you can imagine, more and more companies are leaving the Medicare program to avoid these unfair audits.


Many private insurance companies are now looking a these types of audits.  The underlying question is whether these audits are for supplier integrity, or whether it is to recoup funding back to the insurance provider.  

The Third battle is over Complex Rehab Technology (CRT).  Complex Rehab Technology is described as equipment that is specialized and customized for an individual with mobility challenges. This level of equipment requires a greater knowledge, higher skill set and certification.  Currently these are the specialized companies who are the experts in your community.

The only current certificate required is an ATP- Assistive Technology Provider, which was set to be a
minimum qualification and is for general assistive technology.  There are other certifications currently offered (not yet required), Seating and Mobility Specialist  (SMS) and Certified Rehab Technology Supplier (CRTS).  With all the pressure from competitive bidding, many companies who did not receive a contract (winning bid) are trying to keep their businesses and are trying to migrate to providing complex rehab equipment.

An ATP certification requires only passing a test, it doesn't say you are qualified or good at providing CRT. An ATP who passes the exam on Monday is now on an equal playing field as an ATP who has been providing this level of equipment for 10 years. Would you want a Surgeon who just passed their board exam to perform your surgery or the Surgeon who has experience?

There is legislation in Congress and in the Senate attempting to separate CRT from DME.  This legislation has been years in the making, and spearheaded by NRRTS, NCART and United Spinal. These group are very concerned that the industry, filled with knowledge and experience, may soon disappear if not protected.  You can sign a petition for HR-942 and support CRT.

Tying this back together, what occurs with Medicare will carry over to Private Insurance and Medicaid. If/when you need equipment, unless you know how to fit yourself, and  know what is important, pro's and con's of different equipment and are handy to fix your own equipment; you need this industry to survive.  Many insurance companies are watching closely to these Medicare programs, and many have already adopted parts of the program.

Many manufacturers of Assistive and Rehab Technology Equipment have already frozen research and development- No further Innovation or Advancement.

It is short sighted not to care just because you do not need this equipment now. We are all aging and living longer, and it is inevitable that we will need some piece of adaptive equipment to continue with the quality of life we desire.  Baby Boomers are coming of age and this huge population will depend on Assistive and Rehab Technology to continue to live independently in their homes.  Without a unified effort, we may lose this industry, and lose the local service provider who will assist you when you have a need.

If you are motivated, you can contact your legislator and let them know how you feel. You can find you local representation by clicking here.

Carey Britton, ATP, SMS, CRTS, works for Active Mobility Center, and has been committed to lobby congress, and participate in the Advocacy of people requiring CRT.  Carey can be reached at (954) 946-5793 or emailed at cbritton@wheelchairguys.com