Speculation rife on Round 2 announcement

Friday, October 5, 2012

WASHINGTON – If the HME industry had a collective water cooler to gather around, it's likely the main topic of conversation would be Round 2 payment amounts.

"This is too tight a secret with CMS," said Walt Gorski, vice president of government affairs for AAHomecare.

CMS has said only that it will announce the payment amounts sometime this fall and speculation is rampant about when that might be. The agency is obviously working on it. CMS recently sent bona fide letters to bidders in the mail order diabetes category, and providers had until Oct. 9 to respond.

But for now, it's anyone's guess, say stakeholders.

"There are plenty who feel that they are unlikely to do anything before the election," said Wayne Stanfield, president and CEO of NAIMES. "There are some who believe they will release it at the end of October, but all of that is pure speculation."

The biggest question, especially for providers: What will the payment amounts be? In Round 1, reimbursement across all product categories dropped, on average, 32%.

"I talked to larger providers after we bid and the consensus was 5% to 10% below (Round 1 reimbursement)," said Randy Freeman, owner of Mediwell in the Fort Worth-Dallas competitive bid area. "That doesn't make sense on some of the categories to me. There's not enough blood left to give."

Others tried a more scientific approach. The VGM Group asked these three different groups of providers what discount they applied for each product category: large VGM members, attendees of its Round 2 seminars and users who logged onto the survey at vgm.com. The results of the survey, completed by 226 providers, will be released at Medtrade.

"The fear of several of the HME providers that we represent was that the 32% overall average from the Round 1 re-bid would be the benchmark," said Mark Higley, vice president-development at VGM. "Statistically, the discount appears likely to be less than the Round 1 re-bid."