Week brings volley of bid-related items

Friday, March 18, 2016

WASHINGTON – Last week was busy for the HME industry as both CMS and stakeholders pushed and pulled against the competitive bidding program.

CMS released the new single payment amounts for the Round 2 re-compete on March 15. With 117 geographic regions and thousands of HCPCS codes, stakeholders were faced with the daunting task of going through the numbers code by code to compare these allowables with those from the previous Round 2.

So far, reductions are ranging from a few percentage points to 15% to 20%, they say.

“I’m seeing 3% to 7% reductions in the items I’ve looked at so far,” said Kim Brummett, vice president of regulatory affairs for AAHomecare. “You see a few items that went up, but when you average out a whole product category, it’s lower.”

Reimbursement rates for HME have been, on average, 45% lower as part of the previous Round 2.

Unlike with previous rounds of competitive bidding, CMS didn’t include in its announcement savings from the program, stakeholders point out.

“I think CMS probably expected further reductions,” said Cara Bachenheimer, senior vice president of government relations for Invacare. “I just think we’ve hit rock bottom; the pricing has gotten to a point where it’s just barely sustainable for many providers.”

CMS will now begin the contracting process and said it will offer 12,181 contracts to 637 bidders.

“We are hearing people say, ‘I got a contract, but I bid much higher,’” said Brummett. “If the median is that much lower, that means there had to be some serious low-ball bids in there.”

Meanwhile, Sens. John Thune, R-S.D., and Heidi Heitkamp, D-N.C., on March 17 introduced a bill that would delay a second round of cuts in non-bid areas from July 1 to Oct. 1, 2017.

“That 15 months is fantastic,” said Tom Ryan, president and CEO of AAHomecare. “We think that’s going to buy us a lot more time to have a play next year.”

As a “pay for,” the bill, S. 2736, advances plans to limit federal Medicaid reimbursement to states for DME to the Medicare payment rates from Jan. 1, 2019, to Oct. 1, 2018.

With no legislative vehicle expected in the next few months, it will be necessary to get the bill passed via a “hotline process.”  Stakeholders are working to add co-sponsors to the original 14, as well as get a key Democratic co-sponsor for a House version of the bill, lead by Rep. Tom Price, R-Ga., possibly as early as this week.

“It’s a good bill and we are going to work it and work it hard,” said Ryan.