Nat’l roll out starts to take shape

List of rural zip codes is out, pricing is not far behind
Friday, October 9, 2015

WASHINGTON – All eyes last week were on CMS’s preliminary list of rural zip codes for the national roll out of competitive bidding, with HME providers doing business in those areas set to feel a little less of a cut.

CMS plans to implement bid pricing nationwide on Jan. 1, 2016, with separate fee schedules for regional and rural areas. For regional areas, the agency will base pricing on the average pricing in the competitive bidding areas in the region; for rural areas, it plans to base pricing on the national weighted average plus 10%.

“It’s about a 3% or 4% difference, but when you’re taking cuts this severe, that’s way better,” said Kim Brummett, vice president of regulatory affairs for AAHomecare.

There are more than 16,000 rural zip codes, about 37.8% of all zip codes in the U.S. The remaining zip codes break down like this: 8.6% in Round 1, 32.3% in Round 2, and 20.9% in regional areas, according to an analysis by AAHomecare.

Stakeholders were mapping the list of rural zip codes to population figures to better determine the number of affected Medicare beneficiaries, who will likely experience reduced access to products and services.

“The percent of Medicare beneficiaries that resides in those zip codes is really the important thing for us to know,” said Cara Bachenheimer, senior vice president of government relations for Invacare. “That’s how we understand the scope.”

CMS also released the file formats for the new fee schedules. The actual fee schedules probably won’t be far behind, stakeholders say.

“I expect CMS already has them,” said Andrea Stark, a reimbursement consultant with MiraVista. “But because the pricing is going to be so different, they’re being conservative and diligent.”

Then, in a few months, providers will be faced with potentially having a handful of different fee schedules to contend with—those for bid areas, regional areas, rural areas and, if they’re in a border state, possibly more.

“CMS has definitely upped the complication of figuring out how to accurately project your expected allowables,” Stark said. “What you might find providers doing is setting allowables at the lowest rate possible and adjusting up from there if they get higher reimbursement.”

Bid pricing is already in effect in 100 cities as part of the first two rounds of the program, with average reimbursement cuts ranging from 32% to 45%.