CMS shortens Round 1 contracts

Friday, August 14, 2015

BALTIMORE – CMS announced the timeline for Round 1 2017 last week, with one noticeable difference from previous rounds: The contract period is two years instead of three.

Stakeholders say CMS most likely reduced the contract period to two years so that Rounds 1 and 2 would both end Dec. 31, 2018.

“There’s a good chance CMS could scrap the bid program in its entirety and do something to update the fee schedule or do some kind of national bid program,” said Seth Johnson, vice president of government affairs for Pride Mobility Products. “I’m not sure what their rationale is in bringing these two bid programs into sequence. We’ll find out as we get closer to that date."

By law, CMS is required to recompete competitive bidding contracts at least once every three years.

The change in contract length could impact the number of providers who submit bids, says Kim Brummett,vice president of regulatory affairs at AAHomecare.

“It’s a lot of work for a shorter contract,” she said. “We may see less bidders because of this.”

However, Johnson says the two-year contract could be a blessing for some providers.

“If the rates are lower and/or a supplier did not win a contract then that could be viewed as a good thing,” he said. “It’s all about where the single payment amounts come in and whether the supplier was offered or not offered a contract.”

As for what those rates will be, stakeholders say it’s hard to predict what will happen. In the Round 1 re-compete, the average reduction in reimbursement was 37%. In the original Round 1, it was 32%.

“With the bid prices being where they are right now, it’s difficult to even fathom that they would be lower,” said Cara Bachenheimer, senior vice president of government relations for Invacare.