Effective Date of Rule: Thirty-one days after filing.

     Purpose: To achieve targeted durable medical equipment (DME) savings directed by the legislature in the budget for 2011-2013, the agency is reducing rates for medical equipment and supplies for DME - medical supplies and equipment, DME - other DME, DME - wheelchairs and accessories, enteral nutrition, home infusion therapy/parenteral nutrition, respiratory care (oxygen), and prosthetics and orthotics. The agency revised the necessary sections in order for the permanent changes to be made to the reimbursement methodologies.

     Citation of Existing Rules Affected by this Order: Amending WAC 182-543-9100, 182-543-9200, 182-543-9300, 182-543-9400, and 182-553-500.

     Statutory Authority for Adoption: RCW 41.05.021.

      Adopted under notice filed as WSR 12-13-088 on June 19, 2012.

     Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 5, Repealed 0.

     Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0;      Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 5, Repealed 0.

     Date Adopted: July 30, 2012.

Kevin M. Sullivan

Rules Coordinator

OTS-4862.1

AMENDATORY SECTION(Amending WSR 12-07-022, filed 3/12/12, effective 4/12/12)

WAC 182-543-9100   Reimbursement method -- Other DME.   (1) The agency sets, evaluates and updates the maximum allowable fees for purchased other durable medical equipment (DME) at least once yearly using one or more of the following:

     (a) The current medicare rate, as established by the federal centers for medicare and medicaid services (CMS), for a new purchase if a medicare rate is available;

     (b) A pricing cluster; or

     (c) On a by report basis.

     (2) Establishing reimbursement rates for purchased other DME based on pricing clusters.

     (a) A pricing cluster is based on a specific healthcare common procedure coding system (HCPCS) code.

     (b) The agency's pricing cluster is made up of all the brands/models for which the agency obtains pricing information. However, the agency may limit the number of brands/models included in the pricing cluster. The agency considers all of the following when establishing the pricing cluster:

     (i) A client's medical needs;

     (ii) Product quality;

     (iii) Introduction, substitution or discontinuation of certain brands/models; and/or

     (iv) Cost.

     (c) When establishing the fee for other DME items in a pricing cluster, the maximum allowable fee is the median amount of available manufacturers' list prices for all brands/models as noted in subsection (2)(b) of this section.

     (3) The agency evaluates a by report (BR) item, procedure, or service for medical necessity, appropriateness and reimbursement value on a case-by-case basis. The agency calculates the reimbursement rate for these items at ((eighty-five)) eighty percent of the manufacturer's list or manufacturer's suggested retail price (MSRP) as of July 31st of the base year or one hundred twenty-five percent of the wholesale acquisition cost from the manufacturer's invoice.

     (4) Monthly rental reimbursement rates for other DME. The agency's maximum allowable fee for monthly rental is established using one of the following:

     (a) For items with a monthly rental rate on the current medicare fee schedule as established by the federal Centers for Medicare and Medicaid Services (CMS), the agency equates its maximum allowable fee for monthly rental to the current medicare monthly rental rate;

     (b) For items that have a new purchase rate but no monthly rental rate on the current medicare fee schedule as established by the federal Centers for Medicare and Medicaid Services (CMS), the agency sets the maximum allowable fee for monthly rental at one-tenth of the new purchase price of the current medicare rate;

     (c) For items not included in the current medicare fee schedule as established by the federal Centers for Medicare and Medicaid Services (CMS), the agency considers the maximum allowable monthly reimbursement rate as by report. The agency calculates the monthly reimbursement rate for these items at one-tenth of ((eighty-five)) eighty percent of the manufacturer's list or manufacturer's suggested retail price (MSRP).

     (5) Daily rental reimbursement rates for other DME. The agency's maximum allowable fee for daily rental is established using one of the following:

     (a) For items with a daily rental rate on the current medicare fee schedule as established by the Centers for Medicare and Medicaid Services (CMS), the agency equates its maximum allowable fee for daily rental to the current medicare daily rental rate;

     (b) For items that have a new purchase rate but no daily rental rate on the current medicare fee schedule as established by CMS, the agency sets the maximum allowable fee for daily rental at one-three-hundredth of the new purchase price of the current medicare rate;

     (c) For items not included in the current medicare fee schedule as established by CMS, the agency considers the maximum allowable daily reimbursement rate as by report. The agency calculates the daily reimbursement rate at one-three-hundredth of ((eighty-five)) eighty percent of the manufacturer's list or manufacturer's suggested retail price (MSRP) as of July 31st of the base year or one hundred twenty-five percent of the wholesale acquisition cost from the manufacturer's invoice.

     (6) The agency does not reimburse for DME and related supplies, prosthetics, orthotics, medical supplies, related services, and related repairs and labor charges under fee-for-service (FFS) when the client is any of the following:

     (a) An inpatient hospital client;

     (b) Eligible for both medicare and medicaid, and is staying in a skilled nursing facility in lieu of hospitalization;

     (c) Terminally ill and receiving hospice care; or

     (d) Enrolled in a risk-based managed care plan that includes coverage for such items and/or services.

     (7) The agency rescinds any purchase order for a prescribed item if the equipment was not delivered to the client before the client:

     (a) Dies;

     (b) Loses medical eligibility;

     (c) Becomes covered by a hospice agency; or

     (d) Becomes covered by a managed care organization.

     (8) A provider may incur extra costs for customized equipment that may not be easily resold. In these cases, for purchase orders rescinded in subsection (7) of this section, the agency may pay the provider an amount it considers appropriate to help defray these extra costs. The agency requires the provider to submit justification sufficient to support such a claim.

     (9) The agency may adopt policies, procedure codes, and/or rates that are inconsistent with those set by medicare if the agency determines that such actions are necessary.

[Statutory Authority: RCW 41.05.021. 12-07-022, § 182-543-9100, filed 3/12/12, effective 4/12/12. 11-14-075, recodified as § 182-543-9100, filed 6/30/11, effective 7/1/11. Statutory Authority: RCW 74.08.090 and 74.04.050. 11-14-052, § 388-543-9100, filed 6/29/11, effective 8/1/11.]

     (a) A client's medical needs;

     (b) Product quality;

     (c) Cost; and

     (d) Available alternatives.

     (2) The agency sets, evaluates and updates the maximum allowable fees at least once yearly for wheelchair purchases, wheelchair rentals, and wheelchair accessories (e.g., cushions and backs) using the lesser of the following:

     (a) The current medicare fees;

     (b) The actual invoice for the specific item; or

     (c) A percentage of the manufacturer's list or manufacturer's suggested retail price (MSRP) as of January 31st of the base year, or a percentage of the wholesale acquisition cost (AC). The agency uses the following percentages:

     (i) For basic standard wheelchairs, sixty-five percent of MSRP or one hundred forty percent of AC;

     (ii) For add-on accessories and parts, eighty-four percent of MSRP or one hundred forty percent of AC;

     (iii) For up-charge modifications and cushions, eighty percent of MSRP or one hundred forty percent of AC;

     (iv) For all other manual wheelchairs, eighty percent of MSRP or one hundred forty percent of AC; and

     (v) For all other power-drive wheelchairs, eighty-five percent of MSRP or one hundred forty percent of AC.

     (3) The agency may adopt policies, procedure codes, and/or rates that are inconsistent with those set by medicare if the agency determines that such actions are necessary.

[Statutory Authority: RCW 41.05.021. 12-07-022, § 182-543-9200, filed 3/12/12, effective 4/12/12. 11-14-075, recodified as § 182-543-9200, filed 6/30/11, effective 7/1/11. Statutory Authority: RCW 74.08.090 and 74.04.050. 11-14-052, § 388-543-9200, filed 6/29/11, effective 8/1/11.]

     (a) For items with a rate on the current medicare fee schedule, as established by the federal Centers for Medicare and Medicaid Services (CMS), the agency equates its maximum allowable fee to the current medicare rate; and

     (b) For those items not included in the medicare fee schedule, as established by CMS, the rate is considered by report. The agency evaluates a by report item, procedure, or service based upon medical necessity criteria, appropriateness, and reimbursement value on a case-by-case basis. The agency calculates the reimbursement for these items at eighty-five percent of the manufacturer's list or manufacturer's suggested retail price (MSRP) as of July 31st of the base year or one hundred twenty-five percent of the wholesale acquisition cost from the manufacturer's invoice.

     (2) The agency follows healthcare common procedure coding system (HCPCS) guidelines for product classification and code assignation.

     (3) The agency's reimbursement for a prosthetic or orthotic includes the cost of any necessary molds, fitting, shipping, handling or any other administrative expenses related to provision of the prosthetic or orthotic to the client.

     (4) The agency's hospital reimbursement rate includes any prosthetics and/or orthotics required for surgery and/or placed during the hospital stay.

     (5) The agency may adopt policies, procedure codes, and/or rates that are inconsistent with those set by medicare if the agency determines that such actions are necessary.

[Statutory Authority: RCW 41.05.021. 12-07-022, § 182-543-9300, filed 3/12/12, effective 4/12/12. 11-14-075, recodified as § 182-543-9300, filed 6/30/11, effective 7/1/11. Statutory Authority: RCW 74.08.090 and 74.04.050. 11-14-052, § 388-543-9300, filed 6/29/11, effective 8/1/11.]

     (a) The current medicare rate, as established by the federal Centers for Medicare and Medicaid Services (CMS), if a medicare rate is available;

     (b) A pricing cluster;

     (c) Based on input from stakeholders or other relevant sources that the agency determines to be reliable and appropriate; or

     (d) On a by report basis.

     (2) Establishing reimbursement rates for medical supplies and non-DME items based on pricing clusters.

     (a) A pricing cluster is based on a specific healthcare common procedure coding system (HCPCS) code.

     (b) The agency's pricing cluster is made up of all the brands for which the agency obtains pricing information. However, the agency may limit the number of brands included in the pricing cluster if doing so is in the best interests of its clients as determined by the agency. The agency considers all of the following when establishing the pricing cluster:

     (i) A client's medical needs;

     (ii) Product quality;

     (iii) Cost; and

     (iv) Available alternatives.

     (c) When establishing the fee for medical supplies or other ((nonDME)) non-DME items in a pricing cluster, the maximum allowable fee is the median amount of available manufacturers' list or manufacturers' suggested retail prices (MSRP).

     (3) The agency evaluates a by-report (BR) item, procedure, or service for its medical necessity, appropriateness and reimbursement value on a case-by-case basis. The agency calculates the reimbursement rate at eighty-five percent of the manufacturer's list or manufacturer's suggested retail price (MSRP) as of July 31st of the base year or one hundred twenty-five percent of the wholesale acquisition cost from the manufacturer's invoice.

     (4) The agency may adopt policies, procedure codes, and/or rates that are inconsistent with those set by medicare if the agency determines that such actions are necessary.

     (5) For clients residing in skilled nursing facilities, see WAC 182-543-5700.

[Statutory Authority: RCW 41.05.021. 12-07-022, § 182-543-9400, filed 3/12/12, effective 4/12/12. 11-14-075, recodified as § 182-543-9400, filed 6/30/11, effective 7/1/11. Statutory Authority: RCW 74.08.090 and 74.04.050. 11-14-052, § 388-543-9400, filed 6/29/11, effective 8/1/11.]

OTS-4864.1

AMENDATORY SECTION(Amending WSR 11-14-075, filed 6/30/11, effective 7/1/11)

WAC 182-553-500   Home infusion therapy/parenteral nutrition program -- Coverage, services, limitations, prior authorization, and reimbursement.   (1) The home infusion therapy/parenteral nutrition program covers the following for eligible clients, subject to the limitations and restrictions listed:

     (a) Home infusion supplies, limited to one month's supply per client, per calendar month.

     (b) Parenteral nutrition solutions, limited to one month's supply per client, per calendar month.

     (c) One type of infusion pump, one type of parenteral pump, and/or one type of insulin pump per client, per calendar month and as follows:

     (i) All rent-to-purchase infusion, parenteral, and/or insulin pumps must be new equipment at the beginning of the rental period.

     (ii) The ((department)) agency covers the rental payment for each type of infusion, parenteral, or insulin pump for up to twelve months. (The ((department)) agency considers a pump purchased after twelve months of rental payments.)

     (iii) The ((department)) agency covers only one purchased infusion pump or parenteral pump per client in a five-year period.

     (iv) The ((department)) agency covers only one purchased insulin pump per client in a four-year period.

     (2) Covered supplies and equipment that are within the described limitations listed in subsection (1) of this section do not require prior authorization for reimbursement.

     (3) Requests for supplies and/or equipment that exceed the limitations or restrictions listed in this section require prior authorization and are evaluated on an individual basis according to the provisions of WAC ((388-501-0165)) 182-501-0165 and ((388-501-0169)) 182-501-0169.

     (4) ((Department)) The agency may adopt policies, procedure codes, and/or rates that are inconsistent with those set by medicare if the agency determines that such actions are necessary.

     (5) Agency reimbursement for equipment rentals and purchases includes the following:

     (a) Instructions to a client or a caregiver, or both, on the safe and proper use of equipment provided;

     (b) Full service warranty;

     (c) Delivery and pickup; and

     (d) Setup, fitting, and adjustments.

     (((5))) (6) Except as provided in subsection (6) of this section, the ((department)) agency does not pay separately for home infusion supplies and equipment or parenteral nutrition solutions:

     (a) When a client resides in a state-owned facility (i.e., state school, developmental disabilities (DD) facility, mental health facility, Western State Hospital, and Eastern State Hospital).

     (b) When a client has elected and is eligible to receive the ((department's)) agency's hospice benefit, unless both of the following apply:

     (i) The client has a preexisting diagnosis that requires parenteral support; and

     (ii) The preexisting diagnosis is not related to the diagnosis that qualifies the client for hospice.

     (((6))) (7) The ((department)) agency pays separately for a client's infusion pump, parenteral nutrition pump, insulin pump, solutions, and/or insulin infusion supplies when the client:

     (a) Resides in a nursing facility; and

     (b) Meets the criteria in WAC ((388-553-300)) 182-553-300.

[11-14-075, recodified as § 182-553-500, filed 6/30/11, effective 7/1/11. Statutory Authority: RCW 74.04.050, 74.08.090, 74.09.530, and 74.09.700. 06-24-036, § 388-553-500, filed 11/30/06, effective 1/1/07. Statutory Authority: RCW 74.08.090, 74.09.530. 04-11-007, § 388-553-500, filed 5/5/04, effective 6/5/04.]

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