Newsletter of the Assistive Technology Advocay Project
A Project of Neighborhood Legal Services, Inc · 295 Main Street, Room 495 · Buffalo NY 14203
(716) 847-0650 · (716) 847-0227 FAX · (716) 847-1322TDD atproject@nls.org · www.nls.org
Supported by NYS Office of Advocate for Persons with Disabilities,TRAID Project, a Project
Funded by The National Institute on Disability and Rehabilitation Research, U.S. Department of Education.
Opinions expressed herein are not necessarily those of either TRAID or NIDRR

In This Issue...
MEDICARE: THE BASICS
ELIGIBILITY FOR AT THROUGH MEDICARE
THE HISTORICAL BARRIER TO AAC DEVICE COVERAGE: NCD 60-9
POLICY CHANGES ISSUED BY HCFA AND THE DMERCs
    Approval Criteria Under NCD 60-23 and the DMERCs’ Policy
    Medicare Drops The Computer-Based Device Exclusion
APPEALING MEDICARE DECISIONS
Special Features
A NAME CHANGE FOR HCFA
2001 MEDICARE PREMIUMS AND DEDUCTIBLES
THE RERC WEBSITE
CHANGES IN MEDICARE LAW AND POLICY WILL BENEFIT PERSONS WITH ALS

        Augmentative and alternative communication (AAC) devices allow individuals to speak by electronic means. These devices have been commercially available for more than 20 years and, like other computer-based technology, the devices available today are far superior to those available just a few years ago. The cost of an AAC device can be as little as $500. The more expensive devices, with accessories, can range up to $8,000 or more.

        After many struggles with New York's Medicaid program in the 1980s, the State Department of Health, in 1991, developed comprehensive policy guidelines for approving Medicaid funding of AAC devices. Like many other states, New York's Medicaid program will approve funding for an AAC device when it is both medically necessary and the least costly alternative that can meet the individual's communication needs.

        Medicare has been a different story. For many years, most Medicare decision makers were bound by a National Coverage Decision (NCD) that held that AAC devices were convenience items that could not be approved. This policy was not binding on Medicare's administrative law judges, but very few appeals ever got that far. This meant that most individuals who relied on Medicare as their form of health insurance were, as a practical matter, precluded from obtaining funding for AAC devices.

        In April 2000, following a strong advocacy effort from a group of advocates and speech pathologists, the federal Health Care Financing Administration (HCFA) announced that it was rescinding its existing NCD, mentioned above, and would allow AAC devices to be covered under Medicare's durable medical equipment (DME) category. As described below, HCFA later published a new NCD 60-23 that explains when AAC devices will now be covered.

        This article will briefly describe what Medicare is, how an individual becomes eligible, and the procedures for obtaining DME under Medicare Part B. It will then describe the historical problem in obtaining funding for AAC devices through Medicare and how recent policy changes have addressed this problem. We will also describe an exclusion for computer-based devices that appears in the revised policy and HCFA's decision to drop that exclusion. Finally, the article will briefly describe the appeal procedures available to challenge Medicare denials of funding for AAC devices or other items sought through Medicare's DME category.

MEDICARE: THE BASICS

        Medicare is the nation's largest health insurance program. See previous issues of IMPACT covering this topic: Medicare and Managed Care: the Application and Appeals Process (Winter/Spring 2000); Medicare and Assistive Technology (AT): A Major Funding Source for Both Young and Older Adults (July/August 1997). Medicare covers three primary classes of recipients:

• persons age 65 or older
  
• persons receiving Social Security Disability Insurance (SSDI) payments (including many adults with developmental disabilities who receive SSDI on the earnings record of a parent)
  
• persons with end stage renal disease

        There is also a class of Medicare-Qualified Federal Employees who can qualify for benefits. See Social Security Administration (SSA) Program Operations Manual Systems (POMS) HI 00835.001. SSDI recipients who have exhausted their nine-month trial work period can continue to qualify for Medicare, even if they cease eligibility for SSDI cash benefits, during a 93-month extended period of Medicare coverage. See 42 U.S.C. § 426(b), as amended by section 202 of the Ticket to Work and Work Incentives Improvement Act of 1999 (increasing the period from 39 to 93 months). During the extended coverage period, the individual can receive Medicare under the same terms as described below (i.e., cost-free Part A coverage; optional Part B coverage, with a premium). After the end of the extended coverage period, the individual can pay for coverage under the Premium-Hospital Insurance for Disabled Working Individuals program. See POMS HI 00801.170 (Part A), 00805.005 A.1 (Part B).

        Medicare is divided into two parts, known as Parts A and B. Medicare Part A, known as hospital insurance, covers inpatient care, nursing home care, hospice care, home health services and durable medical equipment (DME). For most Medicare beneficiaries, there is no premium required to obtain Part A coverage. Medicare Part B, known as supplemental medical insurance, covers various outpatient services, including physician services, DME, prosthetic and orthotic devices, and home health services. To enroll in Part B, a Medicare beneficiary must pay a monthly premium ($50 in 2001). State Medicaid programs may pay the Part B premiums for persons with low income. This usually is done through the Qualified Medicare Beneficiaries (QMB) or Specified Low-Income Medicare Beneficiary (SLMB) programs.

        Most Medicare beneficiaries receive benefits through the "traditional" Medicare program. Generally, this means that they are to obtain benefits and then submit claims to a company which contracts with Medicare to oversee the claims reimbursement process. A minority of Medicare beneficiaries receives benefits through a "managed care" option, now referred to as the Medicare+Choice program. The managed care option exists in most parts of the country and is run through any number of local or regional health maintenance organizations (HMOs). The managed care option, as it relates to claims for AT (i.e., DME) coverage, is subject to a prior approval process.

ELIGIBILITY FOR AT THROUGH MEDICARE

        Medicare, through its Part B benefit, will cover AT devices, such as AAC devices or power wheelchairs, under its DME coverage category. Medicare has a four-part definition for DME. It is defined as equipment which:

• can withstand repeated use;
  
• is primarily and customarily used to serve a medical purpose;
  
• generally is not useful to a person in the absence of an illness or injury; and
  
• is appropriate for use in the home.

        When Medicare covers DME, it pays for 80 percent of a Medicare approved rate. The 20 percent co-payment would be the individual's obligation, but it could be covered through Medicaid if he or she is eligible for that program. The approved rate is sometimes less than what the vendor traditionally charges for a piece of DME. If the DME vendor agrees to accept the lower approved rate (i.e., "accepts assignment"), the individual will owe 20 percent of the approved rate. However, if the vendor refuses to accept that rate (i.e., refuses to "accept assignment"), then the individual could owe far more than 20 percent of the purchase price.

        The DME vendor should be familiar with Medicare's process for approving payment. In traditional Medicare (the majority of cases), one of four DME Regional Carriers (DMERCs) will be responsible for claims. In the optional managed care or Medicare+Choice program, all claims will be subject to a prior approval process with claims submitted to the individual's HMO.

        The Medicare Coverage Issues Manual, maintained by HCFA, contains a DME reference list. (See Medicare Coverage Issues Manual § 60-9, also known as National Coverage Decision 60-9.) The list contains the names of more than 100 pieces of DME and then indicates either: 1) that the item is "covered," and under what circumstances it can be approved; or 2) that the item must be "denied." For example, the reference list provides that power wheelchairs are covered and can be approved if the person would be unable to propel a manual wheelchair.

        Readers must be cautioned that many of these coverage status listings are binding only on decision makers prior to the administrative law judge (ALJ) level of appeal. So, for example, AAC devices, which historically appeared on the reference list as "augmentative communication device" or "communicator," had a coverage status listed as "deny - convenience item; not primarily medical in nature." Notwithstanding that status, an ALJ was not bound by that policy and we are aware of 13 ALJ decisions in which the decision awarded funding for an AAC device. It is only as of 2001 that Medicare officially covers AAC devices. Under this new policy, an individual should be eligible for Medicare funding of an AAC device if he or she cannot effectively communicate without one.

        There will be AT devices which appear to meet Medicare's DME definition and do not appear on the reference list. In those cases, the decision maker is authorized to approve funding on a case by case basis if the item is "reasonable and necessary for the individual." This will be important for any items sought by a Medicare recipient which appear to meet the four-part DME test but which do not appear on the reference list as either covered or not covered.

THE HISTORICAL BARRIER TO AAC DEVICE COVERAGE: NCD 60-9

        HCFA, which oversees Medicare, has published numerous National Coverage Decisions over the years. The NCDs have been used to articulate agency policy governing Medicare funding of DME. For both traditional and managed care Medicare, the NCDs are binding at all decision making levels prior to the ALJ hearing. Some NCDs, not relevant to this article, are also binding at the ALJ level.

        NCD 60-9 had, until recently, listed AAC devices as not eligible for coverage under Medicare's DME category. This created a very practical problem for the majority of Medicare recipients who are enrolled in the traditional program. Since a prior approval decision was not available to them, they could not even obtain an initial decision until they took delivery of the AAC device, by either agreeing to pay for it or by having a vendor agree to accept assignment (i.e., agree to accept what Medicare approved as payment, less a 20 percent recipient co-payment). Since there was no chance of approving funding at the initial, DMERC level, no vendors would accept assignment on AAC devices. This explains why so few cases ever made it to the ALJ hearing level, where the success rate was 100 percent (of cases known to have gone that far), including one case handled by our AT Advocacy Project. Even the successful cases took two to four years to go through all appeals, reach the ALJ level, and receive a favorable ALJ decision.Our State and National AT Advocacy Projects, in collaboration with Lew Golinker (AT Law Center, Ithaca, New York), went to great lengths to publicize the ability to obtain Medicare funding for AAC devices if one persisted to the ALJ level. To that end, our National AT Project's two booklets, covering Medicare funding of AAC devices in the traditional and managed care programs, were distributed to thousands of readers nationally. In fact, most of the favorable ALJ decisions involved either Lew Golinker or various AT Advocacy Projects, like ours, throughout the country.

        At the same time that many advocates were pursuing their "one case at a time" strategy, a separate collaboration of advocates and professionals filed a well-documented formal request with HCFA, seeking a review and change to its AAC device policy. That request resulted in the policy changes which are described below.

POLICY CHANGES ISSUED BY
HCFA AND THE DMERCs

        On April 26, 2000, HCFA rescinded the non-coverage policy that appeared in NCD 60-9 and determined that AAC devices are DME. Then, on November 30, 2000, HFCA issued new NCD 60-23, establishing that AAC devices are, effective January 1, 2001, considered to fall within the DME benefit category as "speech generating devices." The new NCD, as written, covered many of the AAC devices on the market and promised to open the door to approval of funding without the need to appeal. [For the full text of 60-23, go to: www.hcfa.gov/coverage/8b-s.htm. This takes you to a site where you can link to the tracking sheet, the Decision Memorandum of April 26, 2000, or the actual Coverage Issues Manual containing NCD 60-23 (www.hcfa.gov/pubforms/06_cim/ci60.htm#_60_23 ).]

        On a separate, but related track, on October 24, 2000, the four Durable Medical Equipment Regional Carriers (DMERCs) joined in issuing a draft policy to establish criteria under which AAC devices would be approved as DME. (The DMERCs are private entities that have been given the authority to make decisions on behalf of Medicare regarding the funding of DME.) In March 2001, the DMERCs issued a final policy for coverage of AAC devices as "speech generating devices." The policy is identical for all four DMERCs and was effective July 1, 2001. (For the full text of the DMERC policy go to: www.palmettogba.com; then search for "speech generating device.")

THE HISTORICAL BARRIER TO AAC DEVICE COVERAGE:
NCD 60-9

        HCFA, which oversees Medicare, has published numerous National Coverage Decisions over the years. The NCDs have been used to articulate agency policy governing Medicare funding of DME. For both traditional and managed care Medicare, the NCDs are binding at all decision making levels prior to the ALJ hearing. Some NCDs, not relevant to this article, are also binding at the ALJ level.

        NCD 60-9 had, until recently, listed AAC devices as not eligible for coverage under Medicare's DME category. This created a very practical problem for the majority of Medicare recipients who are enrolled in the traditional program. Since a prior approval decision was not available to them, they could not even obtain an initial decision until they took delivery of the AAC device, by either agreeing to pay for it or by having a vendor agree to accept assignment (i.e., agree to accept what Medicare approved as payment, less a 20 percent recipient co-payment). Since there was no chance of approving funding at the initial, DMERC level, no vendors would accept assignment on AAC devices. This explains why so few cases ever made it to the ALJ hearing level, where the success rate was 100 percent (of cases known to have gone that far), including one case handled by our AT Advocacy Project. Even the successful cases took two to four years to go through all appeals, reach the ALJ level, and receive a favorable ALJ decision.Our State and National AT Advocacy Projects, in collaboration with Lew Golinker (AT Law Center, Ithaca, New York), went to great lengths to publicize the ability to obtain Medicare funding for AAC devices if one persisted to the ALJ level. To that end, our National AT Project's two booklets, covering Medicare funding of AAC devices in the traditional and managed care programs, were distributed to thousands of readers nationally. In fact, most of the favorable ALJ decisions involved either Lew Golinker or various AT Advocacy Projects, like ours, throughout the country.

        At the same time that many advocates were pursuing their "one case at a time" strategy, a separate collaboration of advocates and professionals filed a well-documented formal request with HCFA, seeking a review and change to its AAC device policy. That request resulted in the policy changes which are described below.

POLICY CHANGES ISSUED BY
HCFA AND THE DMERCs

        On April 26, 2000, HCFA rescinded the non-coverage policy that appeared in NCD 60-9 and determined that AAC devices are DME. Then, on November 30, 2000, HFCA issued new NCD 60-23, establishing that AAC devices are, effective January 1, 2001, considered to fall within the DME benefit category as "speech generating devices." The new NCD, as written, covered many of the AAC devices on the market and promised to open the door to approval of funding without the need to appeal. [For the full text of 60-23, go to: www.hcfa.gov/coverage/8b-s.htm. This takes you to a site where you can link to the tracking sheet, the Decision Memorandum of April 26, 2000, or the actual Coverage Issues Manual containing NCD 60-23 (www.hcfa.gov/pubforms/06_cim/ci60.htm#_60_23 ).]

        On a separate, but related track, on October 24, 2000, the four Durable Medical Equipment Regional Carriers (DMERCs) joined in issuing a draft policy to establish criteria under which AAC devices would be approved as DME. (The DMERCs are private entities that have been given the authority to make decisions on behalf of Medicare regarding the funding of DME.) In March 2001, the DMERCs issued a final policy for coverage of AAC devices as "speech generating devices." The policy is identical for all four DMERCs and was effective July 1, 2001. (For the full text of the DMERC policy go to: www.palmettogba.com; then search for "speech generating device.")

Approval Criteria Under NCD 60-23
and the DMERCs' Policy

        NCD 60-23 provides limited detail to govern Medicare's decision makers. The policy provides that AAC devices "may be covered if the [DMERC's or HMO's] medical staff determines that the patient suffers from a severe speech impairment and that the medical condition warrants the use of a device ..." The policy then goes on to provide definitions for speech generating devices, including those that produce "digitized" speech and those that produce "synthesized" speech. The policy then provides that devices which are simultaneously capable of running software for purposes other than speech generation do not meet the definition of speech generating device and cannot be approved.

        The policy which governs decision making by the four DMERCs is much more specific. It provides seven criteria that must be met:

• a formal written evaluation must be prepared by a licensed speech-language pathologist (SLP) that explains the individual's cognitive and communication abilities, whether communication needs could be met through other options, the rationale for selecting the device in question, and a statement that the individual possesses the ability to use the device;
  
• the individual's medical condition must be one resulting in a severe expressive speech impairment;
  
• the individual's speaking needs cannot be met using natural communication methods;
  
• other forms of treatment have been considered and ruled out;
  
• the individual's speech impairment will benefit from the device sought;
  
• a copy of the SLP's written evaluation and recommendation have been forwarded to the patient's treating physician prior to ordering the device; and
  
• the SLP performing the evaluation may not be an employee of or have a financial relationship with the supplier of the device.

        As a practical matter, the DMERC policy is what will govern the approval for the majority of beneficiaries enrolled in traditional Medicare. Most advocates agree that the DMERC policy is reasonable, essentially providing that an individual qualifies for an AAC device if they have a severe speech deficit and can benefit from an AAC device that helps them overcome that deficit. Those HMOs who approve services for managed care (i.e., Medicare+Choice) enrollees must follow NCD 60-23 but are not governed by the DMERC policy.

Medicare Drops The Computer-Based
Device Exclusion

        In November 2000, Medicare's long awaited AAC device coverage guidance was published, but with an unanticipated limitation: Medicare would cover only "dedicated speech-generating devices." Dedicated devices, as described by Medicare in NCD 60-23, are not "capable of running software for purposes other than speech generation, e.g., devices that cannot also run a word processing package, an accounting program, or perform other non-medical functions." Stated more succinctly, a dedicated device is one that will not be useful to someone without a severe speech impairment. In addition, the Medicare guidance expressly excluded laptop computers, desktop computers and personal digital assistants (PDAs), which may be programmed to perform the same function as a speech generating device.

        By adopting this exclusion, Medicare was limiting the range of choices for individuals who needed the highest functioning AAC devices.  People with amyotrophic lateral sclerosis (ALS or Lou Gehrig's disease), in particular, were predicted to be directly and adversely affected. The Freedom 2000, for example, an AAC device chosen by many people with ALS and the device used by Stephen Hawking, would not be covered by Medicare.

        Overcoming this limitation was a major challenge. Historically, Medicare has excluded so-called "dual-purpose" equipment, i.e., equipment that for some people or in some circumstances can be used to serve a medical purpose, but which for other users or in other circumstances can be used for non-medical purposes. Medicare guidance is clear that these devices are not DME, and hence, are not covered. [Medicare Carriers Manual, § 2100.1, reprinted in CCH Medicare & Medicaid Guide, ¶ 3144.] In other words, this type of coverage limitation was not an exclusion created just for AAC devices.

        Several AAC device manufacturers decided that the way out of this dedicated-device dilemma was to create alternative versions of the dual-purpose devices, in which the personal computing functions did not work. Ironically, to do so meant that the alternative, dedicated devices would be more expensive that the dual purpose devices. In total, five dedicated device prototypes were constructed from existing multi-functional AAC devices:

        These devices have been modified to run only AAC software. Each will proceed directly to the AAC software when turned on, and there is no way to exit the AAC program short of turning off the machine. Also, there is no way to load other software. Functionally, these devices are all indistinguishable from a Dynavox, a dedicated AAC device.

        In late March 2001, Medicare officials agreed that as long as these devices were functionally dedicated, they had no further concern about whether they were built into a computer or PDA platform. The final language of the DMERCs' policy suggests that they will follow a similar approach for AAC device approval.

APPEALING MEDICARE DECISIONS

        The appeals system governing Medicare denials for DME coverage will vary slightly, depending on whether an individual is covered through the traditional program or through the managed care option. The time periods for requesting appeals will also vary depending on the level at which the most recent decision was made. For these reasons, the consumer or advocate should carefully read the denial notice for instructions on how to appeal and the time limits for doing so.

        The following charts describe the appeals available and time limits for requesting the various appeals for those DME cases that involve both traditional Medicare and managed care Medicare.

CONCLUSION

        Medicare's new policy for approving AAC devices will benefit many individuals. The challenge now is to get the word out about this policy change - - to speech-language pathologists, to other professionals, and to Medicare beneficiaries. We encourage our readers to help us get the word out. Please feel free to copy and distribute this newsletter. In our Upcoming Issues Funding of Assistive Technology Through our State's Vocational Rehabilitation Agencies • The obligations of VESID and the Commission for the Blind and Visually Handicapped • Including new provisions from 2001 federal regulations. We will also be updating a number of our older articles

CHANGES IN MEDICARE LAW
AND POLICY WILL BENEFIT
PERSONS WITH ALS

        In December 2000, Congress granted people with amyotrophic lateral sclerosis (ALS or Lou Gehrig's disease) a special benefit. Typically there is a 24 month waiting period after onset of disability before a person becomes Medicare eligible. For people with ALS, Congress has waived that requirement, effective July 2001. Thus, Congress has made it possible for people with ALS to become Medicare eligible sooner and, at the same time, Medicare has changed its policy to cover AAC devices. Now that the computer-exclusion also has been eliminated, people with ALS will be able to select from the full range of device choices, including the Freedom 2001-E, the dedicated twin to the Freedom 2000.

         The AT Advocacy Project will provide statewide services: including limited advocacy services and technical assistance to advocates wanting to access funding for assistive technology for individuals with disabilities.

Welcome to Neighborhood Legal Services’ data bank!

        Do you have decisions of interest relating to assistive technology in the following areas? Medicaid, Medicare, Vocational Rehab, VA, Special Education, Physically Handicapped Children’s Program, Private Insurance, etc.

        Other advocates can benefit from your experience. If you have fair hearing decisions or are involved in or have completed litigation in these areas, we want to know about it.

Funding of Assistive Technology Through our State's Vocational Rehabilitation Agencies

• The obligations of VESID and the Commission for the Blind and Visually Handicapped

• Including new provisions from 2001 federal regulations
  
  We will also be updating a number of our older articles.

Previous IMPACT Newsletters Table of Contents | NLS Home Page | Feedback