CMS will consider whether it has sufficient data to curb payments for negative pressure wound therapy pumps, the agency said in response to a March 19 report by the HHS Office of Inspector General.

The OIG analyzed 304 negative pressure pump claims for the first half of 2007 and concluded Medicare was significantly overcompensating for the devices.

Based on claims data on four newer pump models - Medela's Vario , Smith & Nephew's Versatile 1 and VISTA Versatile 1 , and Boehringer's Engenex - OIG determined that suppliers paid an average of $3,604 per pump compared to Medicare's average purchase price of $17,165.

CMS stresses in its response to the report that it needs to meet certain legal and technical requirements to activate its "inherent reasonableness" authority, which, under a 2005 rule, allows the agency to amend "grossly deficient" or "grossly excessive" payments for clinical lab tests and durable medical equipment (¹ Also see "CMS Gains Authority To Adjust “Grossly” Unsuited Payments Under Final Rule" - Medtech Insight, 19 December, 2005., p. 7).

The agency said it "will consider whether it would be able to gather valid and reliable data, as the statute requires, in making such a determination" that prices for NPWT pumps are excessive.

In 2007, OIG issued a similar report warning CMS that Medicare was overpaying for NPWT pumps, but it addressed only claims for devices by V.A.C. marketer Kinetic Concepts - the dominant provider of pumps to Medicare beneficiaries (² Also see "HHS Inspector General Warns CMS It Is Overpaying For Wound Pumps" - Medtech Insight, 16 July, 2007., p. 10).

In arguing that CMS should take action to lower reimbursement for NPWT pumps, the current report points out that the rates are based on a price provided by KCI when Medicare first started covering the devices in 2001. Now, however, "a number of manufacturers have introduced new pump models to the market and are charging substantially less for them."

KCI claims that its technology is more advanced than competitors' and, thus, warrants higher prices.

All negative pressure pumps are included within the same Healthcare Common Procedure Coding System code, although CMS recently said it was reevaluating coding for the devices (³ Also see "CMS Reviewing HCPCS Coding For Negative Pressure Wound Therapy" - Medtech Insight, 12 January, 2009., p. 11).

Competitive Bidding Again Rears Its Head

Another way CMS could clamp down on NPWT pump pricing is to include the products in the second round of the durable medical equipment competitive bidding program, the report suggests. CMS said it would consider the recommendation.

NPWT pumps were excluded from the first round of bidding by the Medicare Improvements for Patients and Providers Act of 2008 (⁴ Also see "Medicare Bill Becomes Law: Industry Focuses On What Didn’t Make the Cut" - Medtech Insight, 21 July, 2008., p. 5). KCI had already declined to participate, claiming the bidding-based payments did not account for the complexity and clinical superiority of its V.A.C. system (⁵ Also see "KCI Cites Flaws In Competitive Bidding Program, Declines To Participate" - Medtech Insight, 2 June, 2008., p. 9).

Under MIPPA, the delayed first round of competitive bidding program is not scheduled to restart until next year, with the second round slated for 2011.

Supplier/Clinician Communication Found Lacking

Suppliers are expected to communicate with clinicians to assess a patient's wound healing progress and whether pump therapy should continue. However, data collected by the inspector general show that suppliers reported having no contact with treating clinicians for almost 25% (28 of 123) of the beneficiaries who rented the pumps for multiple months.

OIG recommends CMS educate suppliers of new pump models that clinician input is crucial in determining the continued patient need for NPWT. The report advises the agency to follow up on claims in which suppliers reported having no clinician contact or did not submit documentation, or in which suppliers could not be identified.

CMS agreed, adding that it may begin requiring suppliers to use a claim modifier to confirm the prescribing physician has followed up on the beneficiary's care within the last 30 days.

- Brooke McManus (b.mcmanus@elsevier.com)

HHS IG Urges Medicare To Crack Down On Negative Pressure Pump Payments

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