CMS finalizes rule on bidding, bundling

Friday, November 7, 2014

WASHINGTON – CMS plans to move forward with its plans to implement competitive bid pricing nationwide, despite widespread opposition from the HME industry.

“This is a big deal,” said Kim Brummett, senior director of regulatory affairs for AAHomecare.

The agency issued its final rule Oct. 31. The proposed rule was published in July.

The biggest concern: the application of bid rates in non-competitive bidding areas (CBAs), beginning Jan. 1, 2016 and phased-in over a six-month time period. In rural areas, defined as a postal zip code with more than 50% of its geographic area outside of an MSA, or a zip code that has a low population density area that was excluded from bidding, the payment amount will be 110% of the average single payment amount (SPA) of all the competitive bid areas. 

“We still contend that those SPAs are not reflective of costs and they are not sustainable,” said Brummett. 

Rehab stakeholders are already seeking clarification on how CMS plans to determine payments for wheelchair accessories. The agency says it plans to use the weighted average of the SPAs for accessories used on different base equipment, but that could create complications for complex rehab.

“It appears they may look to apply some of the wheelchair accessory codes to complex rehab even though complex rehab is exempt from the bidding program,” said Seth Johnson, vice president of government relations for Pride Mobility. “There are many accessories that are subject to bidding that have been paid in the past with modifiers. It appears Medicare is looking to move away from the application of such modifiers.”

Unlike in CBAs, there’s no requirement for providers in rural areas to service patients or accept assignment—creating a potential access issue, stakeholders say, although CMS disagrees.

“CMS still contends that they don’t anticipate that patients will have any issues with access to care, nor do they think the volume of unassigned claims will increase,” said Brummett.

An Office of Inspector (OIG) study on the impact of bidding on rural studies needs to be done before CMS moves ahead with its plan, say stakeholders.

“Congress needs to put the brakes on the nationwide roll-out until they get an OIG study,” said John Gallagher, vice president of government relations for The VGM Group. “The OIG says it will take them until the end of 2015 to finalize the study.”

Meanwhile, says Gallagher, the OIG has indicated it is seeing access issues, particularly with oxygen.

The final rule also includes a scaled-back plan to create bundled payments for certain DME. While the proposed rule included oxygen, standard manual wheelchairs, enteral nutrition, RADs and hospital beds, the final version only includes power wheelchairs and CPAP in up to 12 areas. 

“The goal with testing bundling is to phase it in more broadly in the long term,” said Brummett. “This is something we certainly have to watch and participate in and provide feedback.”