BILL ANALYSIS Ó
AB 582
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Date of Hearing: April 9, 2013
ASSEMBLY COMMITTEE ON HEALTH
Richard Pan, Chair
AB 582 (Chesbro) - As Amended: April 1, 2013
SUBJECT : Medi-Cal: custom rehabilitation technology services.
SUMMARY : Establishes complex rehabilitation technology (CRT),
such as power wheelchairs, specialized wheelchair electronics,
and nonstandard manual wheelchairs as a separate benefit,
instead of a component of the durable medical equipment (DME)
benefit in the Medi-Cal program. Specifically, this bill :
1)Revises the definition of custom rehabilitation equipment by
renaming it CRT and establishes a separate category of
Medi-Cal benefit.
2)Requires CRT providers to be enrolled as a provider in the
Med-Cal program, meet the supplier and quality standards
established for a DME supplier, be accredited by a recognized
accrediting organization as a supplier of complex
rehabilitation technology, employ or contract with at least
one qualified rehabilitation technology professional for each
distribution location, have the qualified rehabilitation
technology professional physically present for the evaluation
and determination of the complex rehabilitation technology
provided, maintain a reasonable supply of parts, adequate
physical facilities, and qualified service or repair
technicians, and provide patients with prompt services and
repair for all complex rehabilitation technology supplied.
3)Requires reimbursement for complex rehabilitation technology
to be subject to the prior authorization process, obtained
through a treatment authorization request and subject to
utilization controls.
4)Requires the upper billing limit (UBL) for CRT to reflect both
net acquisition cost and labor cost attributable to the
product or service, as determined from a labor index provided
by a nationally recognized professional organization selected
by the Department of Health Care Services (DHCS) based on the
organization's expertise in the provision of complex
rehabilitation technology. Specifies the UBL calculation for
multiple claim lines or codes.
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5)Requires reimbursement by Medi-Cal managed care plans to be
consistent with the provisions of this bill as specified.
6)Provides that it is the intent of the Legislature to provide
the support necessary for patients with CRT needs to stay in
their homes or community settings, prevent avoidable
institutionalization, reduce secondary medical complications,
ensure adequate access, recognize the value of preventive and
specialized services in the treatment of complex needs
patients, establish or improve safeguards related to the
delivery of CRT, and ensure cost efficiency in the provision
of CRT.
EXISTING LAW :
1)Establishes the Medicaid program (Medi-Cal) in California to
provide health care services to low-income families, children,
seniors, and people with disabilities.
2)Establishes a schedule of benefits and services in the
Medi-Cal program, including DME and requires DHCS to establish
a list of covered services and maximum allowable reimbursement
rates for DME as defined in regulations.
3)Prohibits, through Medi-Cal regulation:
a) A provider from charging for any service or any article
more than would have been charged for the same service or
article to other purchasers of comparable services or
articles under comparable circumstances (this regulation is
referred to as the Medi-Cal "Best Price" regulation); and,
b) A provider from billing or submitting a claim for
reimbursement for rendering health care services to a
Medi-Cal beneficiary in any amount greater or higher than
the usual fee charged by the provider to the general public
for the same service.
4)Requires DHCS to establish maximum allowable rates for DME and
provides that if there is no specified rate that it be the
lesser of:
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a) Usual charges made to the general public or the net
purchase price plus a mark-up, as specified by regulation;
b) A negotiated contract price based on the guaranteed
acquisition cost;
c) Actual acquisition cost plus a markup;
d) The manufacturer's suggested retail documented by a
printed catalogue or a hard copy of an electronic catalogue
page showing the price on or prior to the date of service,
reduced by a percentage discount as specified; or,
e) A price established through targeted product-specific
cost containment provisions developed with providers.
5)Defines custom rehabilitation equipment as equipment, or
product system, whether modified or customized, that is used
to increase, maintain, or improve functional capabilities with
respect to mobility and reduce anatomical degradation and
complications of individuals with disabilities. Custom
rehabilitation equipment includes, but is not limited to,
nonstandard manual wheelchairs, power wheelchairs and seating
systems, power scooters that are specially configured,
ordered, and measured based on patient height, weight, and
disability, specialized wheelchair electronics and cushions,
custom bath equipment, standers, gait trainers, and
specialized strollers.
6)Defines CRT services as including the application of enabling
systems designed and assembled to meet the needs of a patient
experiencing any permanent or long-term loss or abnormality of
physical or anatomical structure or function with respect to
mobility. Specifies the services included, such as evaluation
of the needs of a patient with a disability, the documentation
of medical necessity; the selection, fit, customization,
maintenance, assembly, repair, replacement, pick-up and
delivery, testing of equipment and parts; the training of a
caregiver and of the patient who will use the technology or
individuals who will assist the complex needs patient in using
the technology.
7)Requires a qualified rehabilitation technology professional to
be licensed, certified, registered or credentialed, as
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specified.
8)Requires a medical provider to conduct a physical examination
of a patient who is a Medi-Cal beneficiary before prescribing
CRT. Requires the medical provider to complete a certificate
of medical necessity, developed by DHCS, which documents the
medical condition that necessitates the technology and
verifies that the patient is capable of using the technology
safely.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author the purpose of
this bill is to establish CRT services as a separate benefit
under the Medi-Cal program, differentiating it from other less
complicated or costly DME and to update the current statutory
references to reflect contemporary terminology and
credentialing options. The author states that CRT, such as
powered wheelchairs and other mobility and positioning
equipment is generally more expensive and more complicated to
fit, build and service than other DME. Medi-Cal's current
inclusion of CRT within the broad DME benefit category fails
to recognize critical differences in the population served,
the level of professional resources required, and the degree
of difficulty involved in tailoring equipment to the
individual and the need to continually adjust and service the
equipment
The author argues that continuing this "one size fits all"
policy jeopardizes the continued availability, quality, and
cost efficiency of services throughout the state. The author
points out that most DME involves a one-time over-the-counter
exchange between a supplier and a beneficiary. In contrast,
CRT involves an interdisciplinary team approach in which
specialized staff assesses individual patient needs, customize
or build a product, fit it to the individual, adjust it on a
periodic basis, and provide any required service. The author
further argues that similar to orthotics and prosthetics,
which are separate Medi-Cal benefits, CRT must grow with the
individual and adapt to changes in their overall medical
condition. According to the author, CRT is often the
difference between an individual living independently and much
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more expensive facility-based care. Used properly, it helps
promote independence, avoids institutionalization and reduces
related medical complications. The author states that this
bill is designed to enable DHCS to treat CRT separately when
evaluating access, establishing purchasing guidelines,
reviewing policies and procedures and adopting related
utilization controls, reimbursement methodologies, and audit
models. In addition, this bill is necessary to ensure that
this cost-beneficial category of products and services receive
the appropriate level of targeted analysis when DHCS is
considering benefit reductions, rate cuts, and other program
changes that will impact the lives of those who depend upon
complex rehab for their very existence.
2)BACKGROUND . CRT was included as a Medicare benefit over 40
years ago; Medicaid followed a short time later. CRT products
and associated services include medically necessary, custom
fabricated devices that require evaluation, assembly, fitting,
adjustment, programming, and other special handling. CRT
refers to individually configured manual wheelchair systems,
power wheelchair systems, adaptive seating systems,
alternative positioning systems, and other mobility devices.
These products and services are designed to meet the specific
and unique medical, physical, and functional needs of an
individual with a primary diagnosis resulting from a
congenital disorder, progressive or degenerative neuromuscular
disease, or from certain types of injury or trauma. CRT is
used exclusively by children and adults with significant
lifetime disabilities and chronic or debilitating medical
conditions. This population consists of individuals with
diagnoses that include, Cerebral Palsy, Muscular Dystrophy,
Multiple Sclerosis (MS), Spinal Cord Injury, Amyotrophic
Lateral Sclerosis (Lou Gehrig's disease), Spina Bifida, and
other similar conditions.
This bill is modeled after a proposal to make similar changes to
Medicare on a national level. The proposal was developed by a
broad coalition representing providers, patients with spinal
injuries, and clinicians. According to material provided by
the author, the unique nature of CRT and needs of the
individuals support the creation of a separate benefit
category. They point to the following factors:
a) Clinical-Based Delivery Model : The provision of CRT is
accomplished by an interdisciplinary team consisting of, at
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a minimum, a Physician, a Physical Therapist or
Occupational Therapist, and an Assistive Technology
Professional (ATP) collaborating on an assessment of the
clients' special needs to perform activities of daily
living. CRT is one component of a client's integrated care
plan. To be effective, it must be monitored and adjusted
on a regular basis. CRT providers are the only DME
providers that are statutorily required to employ ATPs.
These specialized staff, which analyze individual patient
needs and ensure the selection of appropriate equipment,
are certified by the Rehabilitation Engineering and
Assistive Technology Society of North America as competent
in the assessment, selection, and provision of CRT
products. This bill requires that a CRT provider must meet
these standards and reiterates the requirement that a
qualified rehabilitation technology expert is required to
be at each distribution location and be present for the
evaluation and determination of the CRT provided.
b) Billing and Pricing Advantages . A separate benefit
category would allow Medi-Cal to adopt reimbursement
policies and practices unique to these services. As an
example, the author asserts that immediate cost
efficiencies could be achieved by adopting the Medicare fee
schedule and reimbursing several additional codes at the
Medicare rate. The bill would also allow DHCS to adopt a
new fee structure for certain unlisted codes that utilize
current manufacture catalog pricing, adopt more aggressive
reimbursement criteria and a single payment methodology.
3)DME REIMBURSEMENT . For individuals who receive DME as a
fee-for-service Medi-Cal benefit or through the California
Children's Services program, DHCS has implemented a variety of
mechanisms to ensure the program is paying the lowest possible
prices for covered medical supplies and services. In many
cases DHCS contracts with a particular provider or
manufacturer and in those cases, goods and services from a
non-contracting provider will not be reimbursed. For DME
products not available through a contracted manufacturer, DHCS
establishes a maximum allowable reimbursement rate. For many
of these services there are standardized Health Care Common
Procedural Coding System codes which are used to set
standardized reimbursement rates. For other DME products,
such as CRT, if there is no maximum allowable reimbursement
rate, reimbursement is individual to each service and is
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referred to as "By Report." In these cases, the amount is
determined by using the lesser of five options. One of these
options is the amount billed subject to a UBL established by
regulation. According to information supplied by supporters,
the UBL was originally established in 2003 as a safeguard
against providers billing Medi-Cal for items they did not
purchase or purchased at below-market prices. DHCS's
rule-making package specifically described the UBL as a
"billing" regulation as opposed to a "reimbursement"
regulation. The final regulations also isolated custom
wheelchairs as the only area in which labor costs were to be
considered in the UBL calculation. However according to the
background, labor costs have not been effectively incorporated
in the current methodology. This bill requires the UBL to
reflect both net acquisition and labor cost attributable to
the product or service as determined by a labor index from a
nationally recognized professional organization selected by
DHCS.
4)SUPPORT . The National Multiple Sclerosis Society-CA Action
Network (MS-CAN) writes in support of this bill that people
living with MS deal with a range of physical, functional, and
cognitive challenges every day. MS-CAN points out that some
require customized wheelchairs to continue to live in their
homes, actively participate in their community, and
independently perform daily activities. These supporters
state that this bill would improve and protect access for
anyone covered by Medi-Cal and would protect consumers by
assuring that providers assessing and assembling CRT are
certified for this role. According to MS-CAN, these
provisions should result in well-functioning CRT equipment and
less consumer cost for ongoing CRT upkeep and modifications.
5)PREVIOUS LEGISLATION . SB 728, (Negrete McLeod) Chapter 451,
Statutes of 2012, revised a provision related to determining
the maximum allowable reimbursement rate for DME in the
Medi-Cal program to use the manufacturer's suggested retail
price as documented by a catalogue showing the price on or
prior to the date of service (further reduced by a specified
percentage) instead of the current requirement that it be
determined by using a catalogue showing the price on June 1,
2006 as the base.
REGISTERED SUPPORT / OPPOSITION :
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Support
California Association of Medical Product Suppliers
Disability Rights California
National Multiple Sclerosis Society-CA Action Network
Western Center on Law & Poverty
Opposition
None on file.
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097