WASHINGTON, DC – In a long-awaited and dramatic announcement late last Tuesday, CMS explained it would not be moving forward with 13 of the 15 product categories in Round 2021 of the competitive bidding program (CBP) that has been scheduled to begin again on January 1, 2021. Round 2021 of the CBP will go into effect only for off-the-shelf (OTS) back and OTS knee braces. At the same time, CMS announced its proposed payment rule for DMEPOS items, proposing changes to the payment formula for DMEPOS items after the public health emergency (PHE) expires.

Competitive Bidding Program – 2021
CMS explained that its decision to remove from the CBP most of the product categories was due to both (i) the industry’s request to delay or cancel Round 2021 of the CBP due to the ongoing coronavirus pandemic, and (ii) the fact that the bids did not result in expected savings. CMS explained that it “is not awarding competitive bidding contracts for any of the 13 product categories for Round 2021 that were previously competed because the payment amounts did not achieve expected savings.” The competitive bidding law allows CMS to exempt from the CBP “items and services for which the application of competitive acquisition is not likely to result in significant savings.”

On the same day, CMS announced that it has made contract offers in 127 competitive bid areas (CBAs) for the OTS back braces and OTS knee braces. Interestingly, CMS made no contract offers in three CBAs for those two product categories because “savings would not be achieved.” In those areas, CMS will pay for these items based on rates derived from the CBP. CMS also released the new single payment amounts (SPAs) and started sending contract offers to bidders for the OTS back braces and OTS knee braces product categories. The new contracts and SPAs for the OTS back and neck braces will go into effect Jan. 1, 2021.

DMEPOS Payment Rules Post-Pandemic
CMS is proposing a revised payment method for DMEPOS items that would go into effect after the PHE ends. The CARES law that Congress passed in March 2020 established the current higher payment rates in non-CBAs. In rural and non-contiguous non-CBAs those rates are set at the blended rates of 50 percent of the unadjusted (2015 fee schedule) and 50 percent adjusted (competitive bid-based) rates. In non-rural non-CBAs, the rates are set at a blended rate based on 25 percent adjusted and 75 percent unadjusted rates. The CARES law requires Medicare to continue those rates until the end of the PHE. At this point, the PHE is set to continue through January 20, 2021, but it appears likely that the PHE will be extended for at least another 90 days or even more.

Assuming that the PHE lasts at least until April 1, 2021, CMS is proposing the following new payment rates [for items included in the CBP]:

• Rural Areas, and Non-Contiguous Non-CBAs: CMS proposes to make the current 50/50 blended rate methodology permanent.
• Non-Rural, Non-CBAs: CMS proposes to change the current 25/75 blended rate back to being based 100 percent on the competitive bid program (prior) SPA rates.
• Former CBAs (for items no longer included in Round 2021): CMS is “seriously considering” continuing with the current CBP-based rates that are in place today. CMS specifically asks for comments on this proposal, as well as alternatives that CMS considered but rejected.

Complex Rehab Manual Wheelchairs/Accessories
CMS is proposing to codify the permanent exemption from the CBP of complex rehab manual wheelchairs, and accessories used with them, that Congress required in December 2019. This proposal also includes the 18-month prohibition on using CBP information to set payment rates for CRT manual wheelchairs accessories, until June 30, 2021.  The industry is still pushing to make these accessories permanently exempt from CBP pricing.

Continuous Blood Glucose Monitors
CMS clarifies that all continuous glucose monitors (CGMs) are DME and that CMS will continue using the fee schedule amounts that are used currently, confirming what CMS established in its January 2017 Ruling that CGMs are DME items.

External Infusion Pumps
CMS proposes to interpret the “appropriate for use in the home” requirement to expand coverage for external infusion pumps under the DME benefit. If finalized, more drugs and biologicals will be covered under the DME benefit.  

HCPCS Code Application Process and Benefit Category Determinations
CMS is proposing to codify the Level II HCPCS code application process that has been in place for years, to provide more transparency to stakeholders. Similarly, CMS is proposing to establish a more public procedure for benefit category and payment decisions related to new DMEPOS items and services that submitted a HCPCS Level II code application.

Stay tuned as more information emerges, and to learn how you can support industry efforts to improve payment rates Comments on the proposed rule are due December 27, 2020.

AAHomecare’s Retail Work Group

The Retail Work Group is a vibrant network of DME industry stakeholders (suppliers, manufacturers, consultants) that meets once a month via video conference during which (i) an expert guest will present a topic on an aspect of selling products at retail, and (ii) a question and answer period will follow. The next Retail Work Group video conference is scheduled for November 12, 2020, at 11:00 a.m. Central. Lisa Wells of NATURALLY ABLE will address “Reaching Your Retail Audience Beyond Google Ads.” Participation in the Retail Work Group is free to AAHomecare members. For more information, contact Ashley Plauché, Manager of Member & Public Relations, AAHomecare ( [email protected]).

Cara C. Bachenheimer, JD, is an attorney with the Health Care Group at Brown & Fortunato, PC, a law firm with a national health care practice based in Texas, where she heads up the firm’s Government Affairs Practice.  Bachenheimer’s practice focuses on federal lobbying activities with Congress, the Administration, and federal regulatory agencies, such as CMS, FDA, IRS, and FAA.  She can be reached at (806) 345-6321 or [email protected].

Jeffrey S. Baird, JD, is Chairman of the Health Care Group at Brown & Fortunato, PC, a law firm with a national health care practice based in Texas. He represents pharmacies, infusion companies, HME companies, manufacturers and other health care providers throughout the United States. Mr. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization, and can be reached at (806) 345-6320 or [email protected].