Moving the HME Industry Forward


How to Fight a CMS Rule

September 22, 2014

BAYONNE, NJ – Some of you may have read my other recent article (Medtrade Monday, Aug 11, 2014, “Patient Rights vs In-Home Rule”), which presented a series of arguments against the Rule. Since then, thanks to JAMES Director Carol Napierski, I have had the good fortune to come into contact with another legal resource, which has been able to offer additional information and insight, under a request for anonymity.

I will employ the in-home rule to help us understand the whole rulemaking game. It all begins by asking whether CMS correctly interpreted the original Medicare statute that granted the DME benefit, when it created the rule that limited “medical necessity” for DME solely to performing MRADL “in the home” (abbreviated as ITH).

CMS’ Authority
The method for determining the legal correctness of a rule comes from an analysis of CMS’s “substantive” authority to issue the rule. OK, what does that mean? The oldest form of substantive analysis is familiar to most of us as Biblical commentary.

For centuries, starting with the ancient Rabbinical scholars and continuing with New Testament theologians, this method sought to extract interpretations of Biblical passages through both analysis of other supporting information in the Biblical texts and an examination of historical evidence that would also support the interpretation. Similarly, we can question the legitimacy of an administrative rule, by referring back to the enabling statute and asking whether the rule was a valid interpretation of the law’s intent.

Analysis of the Rule
Why is the ITH rule an incorrect legal interpretation of Congressional intent?

History: The rule first appears as part of the NCD (National Coverage Determinations), which are a general set of rules (not laws), created by CMS. They serve to qualify beneficiaries for specific benefits. There is no mention of ITH limitations anywhere in the actual Medicare Statute (set of laws comprising the Medicare Act). The statute describes the DME benefit as providing equipment “for use in the home”. It does not specify any limitation on outside use. Nor is there any evidence that Congress ever intended to create such a medical need limitation.

Substance of Medicare Act: CMS may claim that it has procedural authority to issue NCDs, however, the SUBSTANCE of the rule must reflect the actual law. There is no historical reference to ITH prior to this NCD, and the legal definition of DME does not include ITH. Furthermore, prior to this NCD, CMS had never adopted any medical need assessment that included ITH. So where did the ITH come from? Clearly it was an invalid interpretation of the original Medicare specification that DME should be “suitable for use in the home.” This describes a device characteristic (example: smaller than a bread box) not a limitation of medical need. Remember that DME in 1965 also included multiple H tanks, large ventilators, iron lungs etc. These needed to fit into the small confines of domestic quarters.

Congressional Intent: Is there any evidence that when Congress created the DME benefit within Medicare, it had intended to limit the beneficiary’s medical need to use equipment ONLY within the home, without consideration of a patient’s need to leave the residence? Here is why this doesn’t make sense:

a) At the time the Medicare Act was passed, Congress was also approving the Older Americans Act and the Architectural Barriers Act. These promote full community participation by senior citizens and the removal of architectural barriers to promote physical access to public facilities. Why would Congress have passed these laws and at the same time acted to limit disabled senior citizens to activities only within the home?
b) Medicare already has a distinct “medical need” definition for its programs that has no ITH component. Why would Congress put a separate “medical need” component into a DME definition? There are no other medical need specifications in the other services defined in the same section along with the DME benefit.
c) It is true that, under the current statute establishing payment rules, the Medicare Act specifies, “the Secretary (of HHS) shall establish standards for clinical conditions for payments”. However, this statement needs to be set into the context of the entire Medicare Act, where all such specifications are done in strict accordance with the “reasonable and necessary” standard of contemporary medical care. i.e.

The Secretary has no business fabricating his own clinical standards in opposition to accepted medical practice. This leads us to the next section:

Standards of Care: Medicare generally defines medical need as being “reasonable and necessary” when it is consistent with contemporary standards of medical practice. However ITH has never been consistent with any relevant standard of medical practice in 1965, nor is it today. The disciplines of OT, PT, physiatry and geriatric medicine contain no ITH limitation. Their standards of care have never placed a limitation like ITH as an appropriate therapeutic goal, or as a test of need for rehabilitation services. (In the “Home Health” section the Act requires that practitioners set and achieve functional therapeutic goals for their patients with no limit on activities inside or outside the home.) Furthermore, while CMS concedes that many beneficiaries live alone, it does not try to inquire how such persons can actually sustain themselves without fulfilling their own out of home needs.

So here we can see, by demonstrating the “in home rule” is not consistent with any Medicare law, health care policy or standard of care, that the rule has likely been arbitrarily created by CMS to limit benefits, which actually should have been provided to promote the therapeutic goals, physical well being and independence of beneficiaries.  

Next Steps
The logical question now confronts us: Is there any way, short of a costly lawsuit, or lengthy legislative battle to change the rule? Answer: There may be.

There can be recourse to the bi-partisan Joint Administrative Rules Review Committee (JARRC) in Congress. This committee is empowered to review the legal intent of laws and statutes, to determine whether a government agency is correctly applying the law in its rulemaking process. 

The JARRC can arrange a legal hearing on the validity of a challenged rule, file formal objections in the Federal Register and even call for a suspension of the rule for 90 days, until a legislative hearing can be convened. Clearly such rules CAN be fought through legislative branch committee intervention, without ever resorting to court action.

Competitive Bidding’s Final Rule
Now, here’s the icing on the cake: I believe that the bidding program’s controversial “Final Rule” could be equally vulnerable to this type of challenge. By conducting an analysis based on history, substance of the law, congressional intent and standards of care, an overwhelming case for rule change can be made to the JARRC and to the Congress. (Consider the unlawful pricing methodology and the denial of patient due process rights to obtain needed products and services.)

It will be up to our industry leadership to fully exploit this possibility and take action on behalf of patients and providers. Your comments are welcome.   

Herb Paserman, a 30-year-veteran of the HME industry, is marketing manager at Jerrys Drug and Surgical, Bayonne, NJ. Paserman can be reached via e-mail: Herb’s comments/opinions are entirely his own and do not necessarily represent the opinions of Emerald Expositions.