CMS barrels forward with bidding, bundling

Thursday, July 3, 2014

WASHINGTON – CMS’s plan to expand competitive bidding pricing and implement bundled monthly payments for certain HME is a mixed bag of positives and negatives, industry stakeholders say.

Biggest loser: rural areas

In a July 11 proposed rule, the agency outlines plans to apply competitive bidding prices in non-bid areas by using regional prices limited by a national ceiling (110% of the average of regional prices) and the floor (90% of the average of regional prices).

“Until they calculate the ceiling and the floor, it’s tough to say much about this,” said Kim Brummett, senior director of government affairs for AAHomecare. “But it will be a huge hit in rural areas.”

With 45% cuts, on average, as part of Round 2, the regional prices will likely mean big cuts for providers in rural areas even at 110% of the average of regional prices, stakeholders say. To boot: Providers in rural areas are less likely to see volume increases from the program, due to the demographics of the areas they do business in.

In its comments to an advance notice of proposed rulemaking published in February, AAHomecare argued that pricing for HME in rural areas should receive an add-on, much as it does for home health.

“No rural add-on and average bid rates that were wrong—it just doesn’t add up,” Brummett said.

Stakeholders bristle at the idea of using competitive bidding pricing, in general, for anything going forward.

“We believe the methodology is flawed to begin with and the rates are unsustainable,” said Tom Ryan, president and CEO of AAHomecare.

The agency plans to apply expanded competitive bidding pricing Jan. 1, 2016.

Testing the waters with bundling

CMS also outlines plans to phase in bundled monthly payments for enteral nutrition, oxygen, standard manual and power wheelchairs, hospital beds, CPAP devices and respiratory assist devices furnished in no more than 12 metropolitan statistical areas (MSAs).

“At least it’s a demo,” Brummett said. “The big question: What is the rate going to be?”

The MSAs chosen for the demo would have a general population of at least 250,000 and a Medicare Part B enrollment population of at least 20,000 not already included in Round 1 or 2.

Stakeholders worry what bundled payments will do to patient and quality outcomes, for some products more than others.

“When you’re talking about CPAP, compliance is important, and at the end of the day, you have to make sure you have outcomes,” Ryan said.

The agency plans to implement bundled monthly payments, which would cover equipment, supplies, accessories and any necessary maintenance and repairs, Jan. 1, 2015.

CMS will accept comments on the proposed rule until Sept. 2. It expects the rule to appear in the July 11 Federal Register.