Round 2021 raises big question: Where should pricing be?

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Friday, October 30, 2020

WASHINGTON – Industry stakeholders hailed CMS’s decision not to move forward with most of Round 2021 as a “watershed” moment, but they also criticized the agency for trying to have it both ways. 

CMS on Oct. 27 announced new single payment amounts for off-the-shelf knee and back braces but not for 13 other product categories because they did “not achieve expected savings.” 

“You can’t have a one-way bid program,” said Tom Ryan, president and CEO of AAHomecare. “You can’t accept (the bids) when prices go down, and then, when they go up, not accept the reality of that. We need to work through the fog and get to where the pricing would be.” 

AAHomecare has a previously scheduled meeting with CMS officials this week and program transparency will be at the top of the agenda, Ryan said.  

CMS on Oct. 27 also published a proposed rule in which it proposed continuing to pay higher 50/50 blended reimbursement rates in rural and non-contiguous bid areas but not the 75/25 blended reimbursement rates in non-rural, non-bid areas, which will revert back to 100% of adjusted payment amounts on April 1, 2020, or whenever the public health emergency ends. 

“That’s not good, especially if CMS admitted the pricing would have gone up,” said John Gallagher, vice president of government relations for VGM. “It leaves us stagnated with pricing that’s not going to work.” 

Additionally, stakeholders would like some clarification on whether CPI increases will be applied in bid areas. The 2020 fee schedule included, for the first time in several years, increases of 1.6% to 2.4% after several years with no increases. 

The proposed rule also leaves the door open to future rounds of competitive bidding, says Cara Bachenheimer, chair of the healthcare group at Brown & Fortunato. CMS says in the rule that for the 13 product categories left out of Round 2021 it’s considering whether to simply extend the current fee schedule adjustments until “new single payment amounts are calculated for the items once competitive bidding of the items has resumed.” 

“They could do bidding in three years and might propose additional changes to the program, but those would go through regulatory processes,” she said. “They could do it the same way and reach the same conclusion. The leeway is in how they are establishing the payment rate.” 

Whatever CMS decides to do next, it’s clearer than ever that competitive bidding is “fatally flawed,” say stakeholders, who plan to hold up recent developments as further proof of that when they talk to Congress, particularly when it comes to pushing H.R. 2771 over the finish line, says Jay Witter, senior vice president of public policy for AAHomecare. 

“The Hill is very interested in this as it appears there are a number of issues that need to be addressed,” he said. “Now that we have brought some stability to the program, we can focus on reimbursement and we’ll be talking to Congress about the non-rural and non-bid areas.”