VGM highlights increasing costs in letter to CMS

WATERLOO, Iowa – VGM & Associates has sent a letter asking CMS, at minimum, to pay all HME providers in non-rural areas, including those in the 130 competitive bidding areas, the 75/25 blended reimbursement rates to help them offset increasing costs. 

“Since the onset of the COVID-19 pandemic, acquisition costs for many products have been rising steadily in the form of incremental price increases,” writes Clint Geffert, president of VGM & Associates in the Sept. 8 letter. “Fuel costs, delivery vehicle costs and labor costs have also been on the rise. Now, within the last few weeks, several major manufacturers of DME have announced yet another round of surcharges that have already been implemented or will be implemented within the next few weeks. The DME supplier community cannot absorb these price increases and continue to provider products to Medicare beneficiaries.” 

Only providers in non-rural, non-bid areas currently receive the 75/25 blended reimbursement rates through the public health emergency. 

That means, VGM points out, that providers in bid areas are receiving reimbursement that is: 1) tied to previous rounds of bidding; 2) derived via an auction methodology using a “median bid” vs. a clearing price; and 3) based on pre-pandemic demand and cost structure. 

“The HME provider community needs help in the form of higher reimbursement rates, and they need it immediately,” Geffert writes.