Stay focused on task at hand
Audits, new rounds of bidding in the Medicare Rounds 1 and 2 competitive bid areas, ICD-10 transition, face-to-face documentation—so many issues to keep track of to ensure your company is in compliance. But don’t forget that it’s not too late for you to have an impact and increase our chances of Congress passing legislation this year to provide relief from the payment cuts slated to begin Jan. 1, 2016, in rural areas. All year, we and industry leaders have been working in Washington, D.C., to focus legislators’ attention on the upcoming dramatic payment cuts and the impact they will have on consumers and providers. Have you contacted your legislators to explain the ill effects of these cuts and how consumers will be impacted? Don’t delay.
Starting Jan. 1, 2016, Medicare will begin the phase-in of reduced rates, with full implementation on July 1, 2016. CMS announced in October 2014 how it will implement its statutory mandate to reduce payment rates in non-bid areas based upon information gleaned from the Medicare DME bidding program. CMS is dividing the country into eight regions, and within each of those regions, CMS is calculating the average of all the Round 1 and Round 2 bid area payment rates (by HCPCS code) to establish an average rate for that region that will apply in all non-bid areas in that region. The Jan. 1 through June 30, 2016, Medicare payment rate will then be based upon 50% of the current Medicare fee schedule amount (higher rate) and 50% of the lower average regional rate—called the regional single payment amount, or RSPA. On June 30, 2016, the Medicare payment rate will decrease to 100% of the RSPA.
As you look at the numbers, most items will be subject to dramatic reductions. For example, the monthly rental rate for standard power wheelchairs (K0823) will be reduced 26% on Jan. 1, 2016, with a total cut of 51% on July 1, 2016. Oxygen concentrators (E1390) will be cut by 25% on Jan. 1, 2016, and have a total cut of 50% on July 1, 2016; and hospital beds (E0260) will be cut 24% Jan. 1 and a total of 49% July 1, 2016. From a policy perspective, the most dramatic fact is that CMS did not provide a payment increase for providers serving rural areas. Most other Medicare providers receive some level of payment increase to ensure access for beneficiaries residing in rural areas.
The industry has been vigorously working on Capitol Hill to develop support from Congress to mitigate the effects of CMS’s planned expansion of competitive bidding-based pricing to rural communities. At press time, Rep. Tom Price, R-Ga., had pledged to take the lead in the House of Representatives on legislation that would provide relief to providers and patients. Dr. Price is working with Sen. John Thune, R-S.D., who is also concerned with the impact of these cuts on rural providers. At press time, the legislators were working on introducing legislation that would provide the following relief: regional rates would be increased by 30%; the new payment rates would be phased-in over a four-year period rather than CMS’s planned six-month period; and the unadjusted fee schedule would be established as the bid cap, instead of CMS’s plan to set the bid ceiling at previous bid rates.
As part of its plan to roll out DME bid program prices in rural areas, CMS plans to use the bid prices for standard accessories to lower the payment levels for complex rehab accessories that share the same code as its standard counterpart. Payment for 171 HCPCS codes will be affected by this change. This summer, a bill was introduced in the House by Rep. Lee Zeldin, R-N.Y., to clarify that CMS cannot apply bid pricing to CRT accessories, as Congress intended in 2008 when it passed a law excluding CRT items from the program. The CRT community, including several prominent national consumer organizations, are working hard to obtain this legislative clarification passed by Congress by year end.
Cara Bachenheimer is senior vice president of government relations for Invacare.