Moving the HME Industry Forward


AAHomecare Shares Recommendations for Bidding Program Fixes

March 27, 2017

WASHINGTON, DC – Last week, AAHomecare shared HME industry recommendations for fixing significant problems with CMS’ DMEPOS competitive bidding program with HHS Secretary Tom Price. The recommendations focus on six major areas:

1) Use market clearing price to determine Single Payment Amount for any item included in competitive bidding.
2) Use historical claims data to determine supplier capacity.
3) Increase transparency of the competitive bidding program.
4) Reform competitive bidding product categories.
5) Apply uniform payment rules for transitioning DMEPOS competitive bidding beneficiaries.
6) Remove CMS’ authority to move forward with bundled payments for CPAP and standard power wheelchairs.

“HME suppliers, patient groups, and leading economists and auction experts have voiced concerns about major structural problems with the bidding program since it first took effect,” said Tom Ryan, president and CEO of the American Association for Homecare. “With the next round of the bidding program set to consolidate the two rounds into one entity, the time is right for CMS to make these much-needed and common-sense changes. The home medical equipment community and the patients we serve can’t afford to miss this opportunity to improve this program.”

AAHomecare recommends that CMS go through the formal rulemaking process to instate the proposed reforms for the next round of the bidding program, slotted to take effect at the start of 2019, although in some instances the Association believes CMS can make the recommended changes through sub-regulatory guidance.

The recommendations are the result of a collaborative effort involving AAHomecare staff, members of the Association’s Regulatory Council, leading industry stakeholders, and HME regulatory law experts that began in earnest in mid-January of this year.  

The new recommendations follow a February 28th letter requesting action to repeal the full phase-in of the Medicare DMEPOS adjusted fee schedule rates for non-competitive bidding areas that was applied on July 1, 2016.

Respiratory Stakeholders Push Back Against CPAP Bundling Proposal
WASHINGTON, DC – As first reported in late January, CMS included bundling CPAP devices, related accessories, and services on a monthly basis for Round 2019 of competitive bidding for HME, starting with 5 new CBAs specific to CPAP products only.

AAHomecare has been working with leading respiratory stakeholders among its membership and industry groups including AdvaMed, CQRC, and VGM to study the issue and develop a unified response to enable high-quality care for beneficiaries and represent the interests of respiratory providers.

Bundling the CPAP device, consumable items, maintenance, and service into a single monthly payment will cause disruption for suppliers and will provide an incentive to furnish inferior products and provide a lower quality of care to compensate for shrinking margins.  Timely replacement for worn out accessories is likely to suffer, as well.   

As AAHomecare and stakeholders working on the issue understand the Agency’s plans, these bundled monthly rental payments will be for the duration of a beneficiary’s medical need, in spite of the bidding program’s statutory requirements for “capped” rental and “inexpensive and other routinely purchased” equipment categories that apply to CPAP and accessories.

AAHomecare’s research into legislation and other regulations pertaining to the bidding program and Medicare reimbursement for HME leads us to conclude that CMS’ competitive bidding authority does not include the authority to engage in bundled bidding programs for CPAP or other HME products, such as power wheelchairs.

Payment models for CPAP should not jeopardize patients’ access to the specific equipment best suited to their needs or the quality of care they receive,” said Larissa D’Andrea, government affairs director for ResMed, a manufacturer of CPAP and other respiratory medical devices. “Bundling may also be problematic for patients: it could substantially increase copayments and out-of-pocket expenses for beneficiaries. Plus, layering untested bundled payments on top of expanded Competitive Bidding Program rates could compound existing access challenges caused by these other cuts.”

AAHomecare and our partners in this effort will encourage CMS to explore approaches that will allow suppliers to continue to furnish high-quality equipment and take into account maintaining high patient satisfaction and better clinical outcomes for individuals who use CPAP products.  We will release the full text of our forthcoming letter to CMS on the issue when it is finalized and sent to the Agency, and will continue to press the issue with CMS and on Capitol Hill.