Administrative Rules of the State of Montana

BEFORE THE DEPARTMENT OF PUBLIC

HEALTH AND HUMAN SERVICES OF THE

STATE OF MONTANA

In the matter of the amendment of ARM 37.86.705, 37.86.802, 37.86.805, 37.86.1802, and 37.86.1807 pertaining to Medicaid reimbursement for audiology services, hearing aids, and durable medical equipment (DME)

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NOTICE OF PUBLIC HEARING ON PROPOSED AMENDMENT

TO: All Concerned Persons

1. On December 3, 2009, at 1:30 p.m., the Department of Public Health and Human Services will hold a public hearing in the auditorium of the Department of Public Health and Human Services Building, 111 North Sanders, Helena, Montana, to consider the proposed amendment of the above-stated rules.

2. The Department of Public Health and Human Services will make reasonable accommodations for persons with disabilities who wish to participate in this rulemaking process or need an alternative accessible format of this notice. If you require an accommodation, contact Department of Public Health and Human Services no later than 5:00 p.m. on November 24, 2009, to advise us of the nature of the accommodation that you need. Please contact Rhonda Lesofski, Department of Public Health and Human Services, Office of Legal Affairs, P.O. Box 4210, Helena, Montana, 59604-4210; telephone (406) 444-4094; fax (406) 444-9744; or e-mail [email protected].

3. The rules as proposed to be amended provide as follows, new matter underlined, deleted matter interlined:

37.86.705 AUDIOLOGY SERVICES, REIMBURSEMENT (1) Providers must bill for services using the procedure codes and modifiers set forth, and according to the definitions contained in the Health Care Financing Administration's Common Procedure Coding System (HCPCS). Information regarding billing codes, modifiers, and HCPCS is available upon request from the Department of Public Health and Human Services, Health Resources Division, ~~1400 Broadway~~ 1401 East Lockey, P.O. Box 202951, Helena, MT 59620-2951.

(2) Subject to the requirements of this rule, the Montana Medicaid program pays the following for audiology services:

(a) For patients who are eligible for Medicaid, the ~~lower~~ lowest of:

(i) the provider's usual and customary charge for the service; or

(ii) the reimbursement provided in accordance with the methodologies described in ARM 37.85.212.; or

(iii) 100% of the Medicare Region D allowable fee.

AUTH: 53-2-201, 53-6-113, MCA

IMP: 53-2-201, 53-6-101, 53-6-111, 53-6-113, MCA

37.86.802 HEARING AID SERVICES, REQUIREMENTS, AND LIMITATIONS (1) remains the same.

(2) Medicaid payment for purchase ~~or rental~~ of hearing aids will be made only to a licensed hearing aid dispenser for Medicaid covered services provided in accordance with all applicable Medicaid requirements and within the scope of practice permitted under the dispenser's license.

(3) through (7)(c) remain the same.

AUTH: 53-2-201, 53-6-113, MCA

IMP: 53-2-201, 53-6-101, 53-6-111, 53-6-141, MCA

37.86.805 HEARING AID SERVICES, REIMBURSEMENT (1) The department will pay the ~~lower~~ lowest of the following for covered hearing aid services and items:

(a) remains the same.

(b) the amount specified for the particular service or item in the department's fee schedule. The department adopts and incorporates by reference the department's Hearing Aid fFee sSchedule dated July 2009. A copy of the department's fee schedule is posted at http://medicaidprovider.hhs.mt.gov~~. A copy of the department's fee schedule~~ and may be obtained from the Department of Public Health and Human Services, Health Resources Division, ~~1400 Broadway~~ 1401 East Lockey, P.O. Box 202951, Helena, MT 59620-2951.; or

(2) The provider may bill Medicaid for a dispensing fee, as specified in the fee schedule adopted in (1)(b)~~, in addition to the invoice price for the purchase of a hearing aid or aids~~. The dispensing fee covers and includes the initial ordering, fitting, orientation, counseling, two return visits for the services listed, and the insurance for loss or damages covered under a one-year warranty.

AUTH: 53-2-201, 53-6-113, MCA

IMP: 53-2-201, 53-6-101, 53-6-111, 53-6-113, 53-6-141, MCA

37.86.1802 PROSTHETIC DEVICES, DURABLE MEDICAL EQUIPMENT, AND MEDICAL SUPPLIES, GENERAL REQUIREMENTS (1) remains the same.

(2) Reimbursement for prosthetic devices, durable medical equipment, and medical supplies shall be limited to items delivered in the most appropriate and cost effective manner. Montana Medicaid adopts Medicare coverage criteria for Medicare covered durable medical equipment as outlined in the Region D Supplier Manual, local coverage determinations (LCDs) and national coverage determinations (NCDs) dated January 2010. For prosthetic devices, durable medical equipment, and medical supplies not covered by Medicare coverage will be determined by the department. The items must be medically necessary and prescribed in accordance with (2)(a) by a physician or other licensed practitioner of the healing arts within the scope of his practice as defined by state law.

(a) The prescription must indicate the diagnosis, the medical necessity, and projected length of need for prosthetic devices, durable medical equipment, and medical supplies. The original prescription must be retained in accordance with the requirements of ARM 37.85.414. Prescriptions may be transmitted by an authorized provider to the durable medical equipment provider by electronic means or pursuant to an oral prescription made by an individual practitioner and promptly reduced to hard copy by the durable medical equipment provider containing all information required. Prescriptions for durable medical equipment, prosthetics, and orthotics (DMEPOS) shall follow the Medicare criteria outlined in chapters 3 and 4 of the Region D Medicare Supplier Manual (January 1, ~~2009~~ 2010), which is adopted and incorporated by reference. A copy of the Region D Medicare Supplier Manual may be obtained from the Department of Public Health and Human Services, Health Resources Division, ~~1400 Broadway~~ 1401 East Lockey, P.O. Box 202951, Helena, MT 59620-2951. For items requiring prior authorization the provider must include a copy of the prescription when submitting the prior authorization request.

(i) remains the same.

(b) Subject to the provisions of (3), medical necessity for oxygen is determined in accordance with the Medicare criteria outlined in the Medicare Durable Medical Equipment Regional Carrier (DMERC) Region D Supplier Manual, (January 1, ~~2009~~ 2010), Local Coverage Determination (LCD) and policy articles (January 1, ~~2009~~ 2010), and National Coverage Determination (NCD) (January 1, ~~2009~~ 2010), which are adopted and incorporated by reference. The Medicare criteria specify the health conditions and levels of hypoxemia in terms of blood gas values for which oxygen will be considered medically necessary. The Medicare criteria also specify the medical documentation and laboratory evidence required to support medical necessity. A copy of the Medicare criteria may be obtained from the Department of Public Health and Human Services, Health Resources Division, ~~1400 Broadway~~ 1401 East Lockey, P.O. Box 202951, Helena, MT 59620-2951.

(5) Reimbursement for nursing home residents includes:

(a) medically necessary custom molded wheelchair positioning equipment used by nursing home residents not covered under nursing home per diem (see department nursing home rules). A copy of the Medicaid criteria may be obtained from the Department of Public Health and Human Services, Health Resources Division, ~~1400 Broadway~~ 1401 East Lockey, P.O. Box 202951, Helena, MT 59620-2951.

(6) The following items are not reimbursable by the program:

(a) through (b)(i) remain the same.

(ii) the shoes are covered under Medicare criteria for therapeutic shoes for diabetics under the same conditions the Medicare program will cover therapeutic shoes for diabetics. A copy of the Medicare criteria is available upon request from the Department of Public Health and Human Services, Health Resources Division, ~~1400 Broadway~~ 1401 East Lockey, P.O. Box 202951, Helena, MT 59620-2951;

AUTH: 53-2-201, 53-6-113, MCA

IMP: 53-2-201, 53-6-101, 53-6-111, 53-6-113, 53-6-141, MCA

37.86.1807 PROSTHETIC DEVICES, DURABLE MEDICAL EQUIPMENT, AND MEDICAL SUPPLIES, FEE SCHEDULE (1) Providers must bill for prosthetic devices, durable medical equipment, medical supplies and related maintenance, repair and services using the procedure codes and modifiers set forth and according to the definitions contained in the Centers for Medicare and Medicaid Services' (CMS) Healthcare Common Procedure Coding System (HCPCS). Information regarding billing codes, modifiers and HCPCS is available upon request from the Department of Public Health and Human Services, Health Resources Division, ~~1400 Broadway~~ 1401 East Lockey, P.O. Box 202951, Helena, MT 59620-2951.

(2) Prosthetic devices, durable medical equipment, and medical supplies shall be reimbursed in accordance with the department's Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Fee Schedule, effective January ~~2009~~ 2010, which is adopted and incorporated by reference. A copy of the department's fee schedule is posted at the Montana Medicaid provider web site at http://medicaidprovider.hhs.mt.gov. A copy of the department's Prosthetic Devices, Durable Medical Equipment, and Medical Supplies Fee Schedule may also be obtained from the Department of Public Health and Human Services, Health Resources Division, ~~1400 Broadway~~ 1401 East Lockey, P.O. Box 202951, Helena, MT 59620-2951.

(3) through (4) remain the same.

AUTH: 53-2-201, 53-6-113, MCA

IMP: 53-2-201, 53-6-101, 53-6-111, 53-6-113, 53-6-141, MCA

4. The Department of Public Health and Human Services (the department) is proposing amendments to ARM 37.86.705, 37.86.802, 37.86.805, 37.86.1802, and 37.86.1807 pertaining to Medicaid reimbursement for audiology services, hearing aids, and durable medical equipment reimbursable under the Montana Medicaid program. The amendments are necessary to conform Montana Medicaid reimbursement rules for those items reimbursed by Medicare to Medicare standards and to adopt the Medicaid fee based reimbursement methodology.

The department's proposed amendments would include adoption of the U.S. Department of Health and Human Services (HHS), Centers for Medicare and Medicaid Services (CMS), Durable Medical Equipment Reimbursement Center (DMERC) Region D Medicare Fee Schedule, referred to in the proposed rule amendments as the "Medicare Region D allowable fee". Provisions for rental of hearing aids and references to invoice pricing would be deleted. The department's proposed amendments would adopt Medicare criteria for approval of Medicare covered durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). The department would make its own determinations for prosthetic devices, durable medical equipment, and medical supplies not covered by Medicare. The department's Hearing Aid Fee Schedule would be updated to January 1, 2010. The department intends that all proposed amendments be applied effective January 1, 2010. Retroactive application would not adversely affect Medicaid providers or consumers. More detailed descriptions of the proposed amendments are set out below.

ARM 37.86.705

The department proposes amending this rule governing audiology services to include "100% of the Medicare Region D allowable fee" in the reimbursement methodology. This would conform this rule to current department practice for audiology services. The proposed reimbursement method simplifies billing for providers because Medicare and Medicaid fees would be the same. The Medicare reimbursement methodology is a nationally recognized reimbursement standard that fairly reflects the cost of providing audiology services. The department believes adoption of the existing Medicaid Fee Schedule would be more efficient and could potentially be more accurate that than one developed by the department.

ARM 37.86.802

The proposed amendment to this rule governing hearing aid services, requirements, and limitations would remove the reference to hearing aid rental. Medicare does not rent hearing aids and this amendment is necessary to conform the Montana rule to Medicaid policy. Since the Medicare Fee Schedule does not contain a provision for hearing aid rental, this reference would be unnecessary, inaccurate, and could potentially be misleading.

ARM 37.86.805

The proposed amendments to ARM 37.86.805 would add "100% of the Medicare Region D allowable fee" to the reimbursement methodology. The department believes Medicare reimbursement methodology and policies are the best way to optimize Montana's utilization of limited resources while providing a basic level of services to eligible persons.

A reference to invoice pricing would also be removed because it would no longer be necessary under a fee schedule reimbursement method. The proposal to adopt Medicare fees reflects current reimbursement practices used by the department for hearing aid services. Under this methodology, items covered by Medicare would be reimbursed at the Medicare fee rate established by the CMS and items not covered by Medicare would be reimbursed at the rate proposed in the department's Hearing Aid Fee Schedule.

The proposed amendments are necessary because ARM 37.86.805 does not specifically state that Medicare fees should be used as part of the reimbursement methodology for hearing aid services.

ARM 37.86.1802

The proposed amendment to ARM 37.86.1802 would specifically state that Montana follows the Medicare coverage criteria for all Medicare covered durable medical equipment. This would be accomplished by adopting the Medicare Region D Supplier Manual, local coverage determinations (LCDs) and national coverage determinations (NCDs) dated January 2010. For durable medical equipment not covered by Medicare, Medicaid criteria would be followed.

The amendment to ARM 37.86.1802(2)(b) would update the reference to the most recent Medicare Supplier Manual, Medicare's local coverage determination and policy dated January 1, 2010. Montana Medicaid already uses Medicare criteria to determine medical necessity for oxygen.

ARM 37.86.1807

The proposed amendment to ARM 37.86.1807 would update the reference to the department's fee proposed schedule dated January 1, 2010.

Alternative considered

The department considered and rejected the alternative to adopting Medicare fees for audiology services, hearing aids, and Medicare fees and policies for durable medical equipment which would have required the department to develop a set of Montana-specific policies and fees. This would have incurred considerable cost for staff time and would have required cost reports from providers. The proposed method provides consistent fees for providers. This would keep billing procedures simple because Medicare and Medicaid fees would be the same in most instances. Furthermore, the Medicare Fee Schedule is a nationally recognized reimbursement standard. This should assure adequate reimbursement to providers and adequate availability of services and equipment to consumers.

Financial effects

Three new procedure codes for durable medical equipment were added on January 1, 2009 and were reimbursed by report because fees had not yet been set by Medicare. On July 1, 2009 Medicare set fees for the three codes. At the time of publication of this notice, there has been no utilization of the codes in Montana. The projected effect of the proposed amendments on durable medical equipment providers could be $3,302 (total funds).

The financial effect of the proposed amendments on hearing aid providers will be approximately $940 (total funds). Medicaid has set fees for standard hearing aids. With this rule clarification Medicaid will no longer be paying invoice cost on those standard hearing aids.

Persons and entities effected

The proposed changes described in this notice could affect an estimated 81,920 Medicaid recipients and 637 DME providers, 48 audiology providers, and 45 hearing aid dispensers.

5. The department intends the proposed rule changes to be applied effective January 1, 2010. A retroactive application of the proposed rules would not adversely affect Medicaid providers or consumers.

6. Concerned persons may submit their data, views, or arguments either orally or in writing at the hearing. Written data, views, or arguments may also be submitted to: Rhonda Lesofski, Department of Public Health and Human Services, Office of Legal Affairs, P.O. Box 4210, Helena, Montana, 59604-4210; fax (406) 444-9744; or e-mail [email protected], and must be received no later than 5:00 p.m., December 10, 2009.

7. The Office of Legal Affairs, Department of Public Health and Human Services, has been designated to preside over and conduct this hearing.

8. The department maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request that includes the name, e-mail, and mailing address of the person to receive notices and specifies for which program the person wishes to receive notices. Notices will be sent by e-mail unless a mailing preference is noted in the request. Such written request may be mailed or delivered to the contact person in 6 above or may be made by completing a request form at any rules hearing held by the department.

9. An electronic copy of this Proposal Notice is available through the Secretary of State's web site at http://sos.mt.gov/ARM/Register. The Secretary of State strives to make the electronic copy of the Notice conform to the official version of the Notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the Notice and the electronic version of the Notice, only the official printed text will be considered. In addition, although the Secretary of State works to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems.

10. The bill sponsor contact requirements of 2-4-302, MCA, do not apply.

/s/ John Koch /s/ Anna Whiting Sorrell

Rule Reviewer Anna Whiting Sorrell, Director

Public Health and Human Services

Certified to the Secretary of State November 2, 2009.