September 1, 2013 Departments

Policy Analysis: Rent-to-Own May Be Only Option for Medicare Speech-Generating Devices

A new Medicare proposal that would change speech-generating devices from purchase-only equipment to rent-to-own equipment could be better for the patients who use them.

In a proposed 2014 rule [PDF], the Centers for Medicare and Medicaid Services includes each of the six types of independent SGDs in a list of 80 durable medical equipment codes to be converted to capped rental status. According to the proposal:

  • The codes are being reclassified from routinely purchased durable medical equipment payment to the capped rental durable medical equipment class.
  • After a 13-month rental, the supplier must immediately transfer the title to the beneficiary.
  • The supplier would receive 13 monthly payments that total 105 percent of the purchase price. This includes the beneficiary's monthly copayment of 20 percent of the purchase price, a total that is unchanged from current regulations.
  • Medicare might not pay a supplier if the SGD user is institutionalized. Documentation of the beneficiary's continual use of the device is required for Medicare to consider it medically necessary and to maintain coverage. In comments, ASHA objected to the continual use requirement, noting that under this policy a patient would lose functional communication at a time when the ability to communicate is critical.

Standard Medicare rules for SGDs would continue to apply:

  • The supplier must furnish the rental item in good working order throughout its reasonable useful lifetime.
  • The supplier that initially provides the item must continue to do so until the patient no longer needs it or until the patient receives ownership after the 13-month rental period ends.
  • Regulations in effect since 1991 allow beneficiaries who own or rent their devices to receive a new one under certain circumstances. If a patient has continually used an SGD for the device's useful lifetime, or if the item is lost or irreparably damaged, Medicare will replace it. The beneficiary's Medicare administrative contractor determines the "reasonable useful lifetime" of the device, which cannot be less than five years.
  • Only physicians, after receiving an evaluation from a certified speech-language pathologist, may order an SGD. In a separate regulation, effective Oct. 1, 2013, a physician, physician assistant, or nurse practitioner must have an in-person visit with the patient within six months prior to the order. ASHA will seek assurance that the SLP's evaluation will continue to be required prior to the physician's order.
  • As with all equipment, coverage and payment under Medicare Advantage Plans (HMO-type organizations) will vary from plan to plan; patients should check directly with their plans to determine the terms.

As is the situation currently, the supplier must disclose whether it will accept Medicare assignment of all monthly rental claims for the duration of the rental period—that is, whether it accepts the Medicare payment and patient's co-pay as payment in full for the rental.  However, suppliers set their own charges for device features that are not medically necessary or are added for the patient's convenience. The device user must pay for these features, as Medicare does not cover them.

Mark Kander, is ASHA director of health care regulatory analysis.

cite as: Kander, M. (2013, September 01). Policy Analysis: Rent-to-Own May Be Only Option for Medicare Speech-Generating Devices. The ASHA Leader.


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