New Ostomy Product Codes Effective April 2002
Be Sure your Supplier Knows!

In a change achieved largely via the efforts of UOA's Government Affairs Committee, the US Government's Centers for Medicare & Medicaid Services (CMS, formerly HCFA) have adopted new ostomy product classifications, to take effect April 1, 2002, with the potential to significantly improve reimbursement for all ostomates whose supplies are covered by either Medicare or non-Medicare insurance in the US.

In a previous change--also achieved largely by efforts of UOA, which took effect in October 2000, the "usual maximum quantity of supplies" eligible for Medicare reimbursement were doubled in a number of product categories. However, the monetary reimbursements per item were not changed on that occasion. These reimbursement rates have remained static for 10 years or more, although product prices have steadily increased. Consequently, the reimbursements are now woefully inadequate, often below dealer's wholesale cost, with the result that fewer and fewer dealers accept Medicare assignment on ostomy supplies.

The April 2002 changes are intended to actually increase reimbursement rates, although the amounts of monetary increases aren't known yet as I write this article. They accomplish this by assigning new product codes to account for technological advances in ostomy supplies. Then, the more advanced (& more expensive) products which most of us are using nowadays will be reimbursed at a higher rate than the older, less advanced ostomy products.

Since these Government-assigned product codes are used by all public and private insurance in the US, not just by Medicare, the newly approved changes have the potential to improve your reimbursement whether or not you're on Medicare. In any case, your supplier needs to know about these changes if your ostomy supply purchases are covered by any sort of insurance.

The newly introduced product codes are of several kinds. In some cases, an existing category has been split into two categories to account for technological (and price) variations. In other cases, "add-on" codes have been introduced to account for additional features that a product may have.

To illustrate the first kind of change, code A4370 for stoma paste has been replaced by two codes: K0561 for non-pectin based paste and K0562 for pectin-based paste. The concept is that one of these versions (the pectin-based paste) represents the more modern product and will be reimbursed at a higher rate.

To illustrate the 2nd kind of change, I personally use 1-piece pouches with non-convex extended wear barrier, whose code (A4388) hasn't changed. However, the product I use would now be eligible for three "add-on" codes: K0575 for rustle-free material, K0576 for a comfort panel, and K0577 for odor-barrier material. Each add-on code may presumably increase the reimbursement amount.

As you can see, the new regulations are pretty complicated, but it's very important for dealers to be aware of them. To aid dealers in this task, UOA has established a direct line of communication to ostomy product suppliers, in the form of an e-mail listserv, with frequent communications from UOA's Government Affairs chair, Linda Aukett. Dealers may learn about this list at the UOA website, or can subscribe automatically by sending an e-mail to distributorlist-request[at]uoa.org with the word "subscribe" as the Subject. Ask your ostomy supply dealer to subscribe!