New rates paint unclear picture

Friday, October 4, 2013

BALTIMORE – The average reduction in reimbursement for the Round 1 re-compete (37%) doesn’t appear much worse than Round 1 (32%), but it’s not that cut and dry, HME industry stakeholders say.

It’s only when you dive into some of the top codes within each product category and each competitive bidding area (CBA) that you get a true picture of the impact of the new reimbursement, they say.

“The overall 37% figure can be deceiving,” said Kim Brummett, senior director of regulatory affairs for AAHomecare. “Providers need to look at, what is the discount for each product that I do in each area that I’m in?”

For oxygen concentrators (E1390), for example, reimbursement in the Riverside, Calif., CBA will go from $122.90 per month (Round 1) to $88.02 per month (Round 1 re-compete) on Jan. 1, about a 28% reduction. CPAP devices (E0261) will go from $82 to $69.81, about a 15% reduction. Both are in the respiratory product category, which came in at, on average, a 40% reduction.

Further complicating any comparisons: The product categories involved in each round aren’t the same. General HME, for example, includes everything from commodes to hospital beds to TENS devices.

Still, some of the average reductions for product categories, like general HME (47%), shocked stakeholders.

“That’s huge,” Brummett said. “In Riverside, most of their general HME items are 56% off current currency.”

Overall, reimbursement for the Round 1 re-compete looks better than Round 2, which came in at an average reduction of 45%, stakeholders say.

“My guess is it’s easier for CMS to do a better job on nine areas than 91,” said Cara Bachenheimer, senior vice president of government relations for Invacare. “Also, maybe they did a better job throwing out unlicensed firms, resulting in slightly better rates.”

Stakeholders say it’s unclear whether this latest round of reimbursement data will help or hurt the industry’s efforts to advance H.R. 1717, a bill that would replace competitive bidding with a market-pricing program (MPP).

“These numbers, like the numbers in Round 1 and like the numbers in Round 2, are based on a fundamentally flawed process,” said Seth Johnson, vice president of government affairs for Pride Mobility Products. “We’re still missing elements that are necessary to make any kind of judgment.”

While a government shutdown forced CMS to cancel a briefing it planned to hold on Capitol Hill on Oct. 4 to, presumably, boast about the savings it says it will realize from the Round 1 re-compete, stakeholders are tiring of the agency’s song and dance.

“This would be the sixth or seventh time that CMS has come up to the Hill to brief staff and, each time, they have nothing to back up their claims—no information on the rate calculations, no information on the beneficiary impact,” said Jay Witter, vice president of government affairs for AAHomecare. “We’re never going to get that information. So our message to staff is: Take action.”