Proposed Rule Would Allow Medicare Advantage Plans to Limit Patient Choice of Medical Devices

November 7, 2011

On October 11, 2011, the Centers for Medicare and Medicaid Services (CMS) proposed changes to Medicare Part C regulations that would enable Medicare Advantage (MA) plans to limit access to Medicare-covered items, including limiting coverage to specific items and brands of durable medical equipment (DME) supplies. Comments are due by December 12, 2011. McGuireWoods and McGuireWoods Consulting are prepared to assist clients in the medical device industry in submitting comments to CMS and arranging meetings with key CMS contacts to discuss the impact of these proposed rules.

Prior to this rulemaking, CMS received requests for guidance from MA organizations with respect to whether they could offer lower cost sharing for ”preferred” DME products or brands versus ”non-preferred” DME products or brands, as well as whether they could limit coverage of certain DME items and supplies to specific manufacturers’ products or brands. In response, CMS has proposed to add a new paragraph to 42 USC § 422.100, which would clarify that MA organizations may limit coverage to specific manufacturers or brands. In order to ensure that MA enrollees have adequate access to their DME benefits, proposed § 422.100(l) would also establish requirements with respect to access and medical necessity, and would require transition periods, address mid-year changes to preferred DME items and supplies, appeals, and require disclosure of DME coverage limitations to enrollees.

These proposed changes to the Medicare Part C regulations could significantly impact the ability of patients to select and purchase the medical products of their choice if MA organizations utilize a preferred brand and/or product strategy. CMS is soliciting comments on all aspects of the proposed changes, including whether additional or strengthened beneficiary protections are warranted. If CMS finalizes this proposed change, it will monitor and assess plans’ compliance with the new requirements to ensure MA enrollees have appropriate and adequate access to their Medicare Part B-covered DME items and supplies.

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