CMS changes up areas, products in Round 2 recompete

Friday, July 18, 2014

BALTIMORE – Keeping everyone on their toes, CMS has a few surprises up its sleeve for the Round 2 recompete of competitive bidding, say industry stakeholders.

For starters, competitive bidding areas (CBAs) in the Round 2 recompete won’t cross state lines. That means, although the recompete encompasses the same geographic areas as the previous Round 2, there are now 117 CBAs.

“CMS said it’s because of the licensure issues (we saw last time),” said Kim Brummett, senior director of regulatory affairs for AAHomecare. “I think this will save a lot of heartache. What’s challenging, though, is that now there are many more bids for some providers.”

CMS announced plans for the Round 2 recompete of competitive bidding and the national mail-order program July 15. The bidding schedule and education program begin this fall, with the bidding window expected to open in the winter of 2015.

CMS has also shuffled product categories. Providers will be submitting bids in eight product categories, compared to six in the Round 1 recompete. That’s because CMS split nebulizers and supplies (previously part of the respiratory category), and TENS devices and supplies (previously part of general DME) into their own separate categories.

Additionally, walkers have been shifted from general DME into the standard mobility category—a bad move, say stakeholders.

“We really believe walkers should be in the DME category,” said Brummett. “If you do power mobility, you don’t do walkers. If you do walkers, you don’t do power mobility.”

Completely missing from the product list: external infusion pumps and supplies, which were added in the Round 1 recompete. While there haven’t been any reports of widespread access issues, the complex nature of the therapy likely made CMS realize it was a poor candidate for bidding, say stakeholders.

Another surprise: CMS plans to start Round 2 recompete contracts July 1, 2016, and end them Dec. 31, 2018—shorter than the current three-year contracts.

Stakeholders aren’t sure why CMS plans to shorten the contract duration but surmise it may have to do with the agency’s proposal to bundle payments for certain HME starting in 12 metropolitan statistical areas on Jan. 1, 2015.

“It sounds like they may want to accelerate that process of applying bundled pay rates more globally,” said Cara Bachenheimer, senior vice president of government relations for Invacare.

With CMS going full speed ahead on competitive bidding, the industry can’t let up in its efforts to improve the program, say stakeholders. A recently introduced bill that would require bidders to obtain bid bonds currently has 21 co-sponsors; and the U.S. Small Business Administration (SBA) continues to look into the program following a June hearing.

“We’ve already seen Round 2 businesses going out of business,” said John Gallagher, vice president of government relations for The VGM Group. “The SBA is looking at it pretty solidly. They want some numbers from CMS and CMS has yet to respond.”