When we wrote the Medicare FAQs, we included information for patients about Method I and Method II that we could find in the Medicare manuals. When I copied and pasted the link yesterday, I must have copied the link to the professional FAQs by mistake. Patients and professionals are welcome to read information posted for either. Here's the link to the Medicare FAQs for patients:
Here's an article from 1998 that talks about Method II.
There is a difference between being a Method II patient who contracts with a supply company to obtain his/her equipment and supplies and becoming a DME (durable medical equipment supply company). I believe George Harper became a DME, not just a Method II patient. Here's a fact sheet on becoming a DME:
So far as a patient choosing a Fresenius, Aksys, Nxstage or other machine he/she wants and contracting with that company to get it, I don't know how often that happens. In my experience, my former clinic had Method I and Method II patients. We treated them basically the same. They all got training at our clinic. They all came in for clinic appointments once a month. It was just a difference in billing. For Method II patients, we linked them with the company that we contracted with for other equipment. The DME was able to bill Medicare up to $1,974.45 for CCPD patients and I suspect those were the only patients that were on Method II at our clinic, but I don't remember for sure. I don't know why the CCPD reimbursement is so much higher than CAPD or HHD. CCPD and HHD both have machines. Therefore, Baxter and Fresenius must have done a good job lobbying. If I ruled the world (or at least CMS), I'd reimburse all dialysis treatments requiring a machine at the higher rate.
Method II has been an option since the late 1980s. Method II took the financial burden off the clinics for CCPD equipment and supplies for Medicare primary patients, but not CAPD or HHD. I'm providing the data from the earliest date reported in the 2006 USRDS Annual Data Report about how many people were using various treatment options as of December 31, 1994 and December 31, 2004.
-- HHD (1993) - 3,850 (2.1%); HHD (2004) - 1,954 (0.6%)
-- CAPD (1993) - 22641 (12.3%); CAPD (2004) - 10,858 (3.2%)
-- CCPD (1993) - 4,321 (2.4%); CCPD (2004) - 14,907 (4.4%)
So...does anyone have any question that reimbursement influences treatment options?
There have been real and perceived abuses among Method II providers since Day 1. I think CMS would like to only have the composite rate and not have any Method II suppliers. Method II suppliers cost Medicare more and are outside the regulatory system set up for ESRD. They are not monitored by the ESRD surveyors or Networks. The folks working at CMS in the ESRD area and ESRD Networks don't even know who the companies are or where they operate. Even USRDS doesn't track how many patients are Method I or II and tells clinics to count them all as home dialysis patients.
From talking with a couple of these Method II supply companies, I gather to bill Medicare they use the Medicare provider number of the dialysis facility that refers the patient(s). They don't bill the Medicare Intermediary like dialysis clinics. They bill the Medicare contracted payor that used to be called the DMERC (Durable Medical Equipment Regional Carrier) but is now called the DMEPOS (Durable Medical Equipment Prosthetics, Orthotics, and Supplies). Medicare still reimburses at 80% of the allowed charge. However, because the Method II charge is higher for CCPD, patients or their other insurers could be obligated to pay more.
Since the Method II HHD reimbursement is $1,490/month, this is less than a clinic would charge under Method I (composite rate). I can't imagine any DME/Method II supply company providing HHD even 3 times a week for this rate of reimbursement. I have heard of some DME/Method II companies that only take patients with commercial insurance and in that case, they could offer a variety of services, including staff-assisted HHD.