All eyes on new bid-related rule

‘It sounds like a good thing, but we just don’t know what’s in it’
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Friday, September 1, 2017

WASHINGTON – The website of the Office of Information and Regulatory Affairs and the Office of Management and Budget now shows an interim final rule pending review titled “Durable Medical Equipment Fee Schedule, Adjustments to Resume the Transitional 50/50 Blended Rates to Provider Relief in Non-Competitive Bidding Areas.”

It sounds promising, industry stakeholders agree, but because the IFR hasn’t been published yet, they have more questions than answers and, therefore, have refrained from spreading the word.

“If you just look at the title, it sounds like a good thing, but we just don’t know what’s in it,” said John Gallagher, vice president of government relations for VGM & Associates. “We’re waiting on hands and knees.”

The OMB serves as a clearinghouse for federal regulations, a way station where their paperwork and economic burden are reviewed. When the IFR clears the OMB—not a definite but “probable,” says Cara Bachenheimer, senior vice president of government relations for Invacare—it will be published and become effective in 30 to 60 days.

Chief among the questions stakeholders have is what rates CMS is referring to. They were disappointed earlier this year, when CMS implemented a provision in the 21st Century Cures Act requiring the agency to retroactively delay a second round of reimbursement cuts in non-bid areas from July 1, 2016, to Jan. 1, 2017, by using the July 1, 2016, rates, instead of the Jan. 1, 2016 rates.

“The way I read it, they’re either going back to the Jan. 1 non-adjusted rates or they’re looking to continue the adjusted rates for a period beyond what was provided in the Cures Act,” said Seth Johnson, senior vice president of government affairs for Pride Mobility Products. “So it appears there will be payment relief, but we’re not sure what that will look like.”

An extension of the relief provided by the Cures Act could help providers get through 2017 and 2018, before another provision in the Cures Act requires CMS to modify how it calculates rates in non-bid areas by Jan. 1, 2019.

“This could act as a bridge,” Bachenheimer said.

But the relief from the Cures Act, while an improvement, was not what industry stakeholders and their champions in Congress had intended. For oxygen concentrators, for example, the Jan. 1, 2016, non-adjusted rate in New England was $140.56, while the original July 1, 2016, rate was $77.72 and the adjusted July 1, 2016, rate is $125.30. That’s still a 10.9% reduction.

“That’s why we’re not getting too excited,” Gallagher said. “We have people hanging on by a string, and if we’re going back to July 1, that’s when we got gutted.”

The other big question surrounding the IFR is the timing of the adjustments. Will they be retroactive to Jan. 1, 2017? Or will they start once the rule becomes effective?

“I doubt, with (OMB Director Mick Mulvaney), it will be retroactive,” Gallagher said.

With an IFR that could be published as soon as next week and a bill providing bid relief expected to be introduced in the House of Representatives in the next few weeks, September will be a roller coaster of a month.

“We’re super interested to see what comes out of the IFR, but until then, we’re going to keep working this issue,” said Gordon Barnes, director of communications for AAHomecare. “We’re going to keep working with our contacts at CMS and we’re going to keep generating support on the Hill for a variety of fixes to the bid program.”