The Centers for Medicare & Medicaid Services (CMS) has elected to classify 80 durable medical equipment (DME) items, including each of the six types of speech-generating devices (SGDs), as capped rental items rather than purchased equipment. The reclassification was proposed in July 2013, and the final regulations were released on November 22, effective April 1, 2014. ASHA submitted regulatory comments emphasizing the danger posed by the longstanding rule that does not allow DME rental payments (or purchases) when the beneficiary is admitted to an inpatient facility. If the SGD is not arranged and paid for by the hospital, skilled nursing facility (SNF), or hospice, the patient could be without the ability to communicate when that communication is most critical.
The obligations of the supplier will remain the same as current rental requirements.
- The supplier must maintain the SGD in good working order for 5 years.
- The SGD cannot be issued unless the physician presents an order accompanied by an evaluation from a certified speech-language pathologist.
When the SGD is rented, the payment (105% of purchase price) is extended to the supplier over a 13-month period. The beneficiary's cost is the standard 20% co-pay of the total rental payment. After 13 months, ownership is immediately assigned to the patient. During the rental period, the supplier has the option to allow the patient to retain possession of the SGD during institutionalization while receiving no monthly payment, but it is unknown at what incidence this will occur.
CMS staff has cautioned that, when beneficiaries consider rental arrangements, they should carefully examine the contract if the supplier does not accept Medicare assignment. Such arrangements allow the supplier to bill for extra services or features that are not medically necessary.
For further information, view the final regulation 42 CFR Parts 413 and 414 [PDF] and see capped rental rules in sections 30.5-50 of Chapter 20 of the Medicare Claims Processing Manual [PDF].
For questions related to Medicare speech-generating devices, please contact Mark Kander, ASHA's director of health care regulatory analysis, at email@example.com, or a member of the health care economics and advocacy team, at firstname.lastname@example.org.