WASHINGTON, DC – On Dec. 27, 2017, CMS released guidance related to 2016 CURES bill provisions that mandated that federal Medicaid reimbursement to states for HME could not exceed what Medicare would have allowed for these items, in aggregate, beginning on January 1, 2018. While CMS’ guidance noted that states would have flexibility in determining how they could meet these requirements, the Agency suggested that “the simplest way is for the state to base its Medicaid DME payment rates on Medicare’s fee schedule or competitive bid rates or on a lesser percentage thereof.”
While CMS’ original guidance also gave states an impossible-to-meet deadline of Dec. 31 (two-and-half working days) to let CMS know how they planned to meet these requirements, the Agency followed up on Jan. 4 to allow states more time after AAHomecare registered concerns.
With CMS guidance finally in hand, Laura Williard, AAHomecare’s vice president of payer relations, began a year-long campaign partnering with state and regional HME association leaders to make sure that state Medicaid officials were aware that they had flexibility in complying with overall spending requirements mandated by CURES.
In many cases, Williard worked directly with states to properly analyze their Medicaid spend verses Medicare spend on the CURES codes, utilizing a tool developed by CMS. This allowed the states to understand their entire risk and budget analysis in making these decisions – and without going through this exercise, many states would have simply adopted the Medicare fee schedule.
As a result of these efforts, 18 states chose not to reduce 2018 rates: Alaska – Florida – Georgia – Hawaii – Indiana – Iowa – Massachusetts – Michigan – Minnesota – North Carolina – Oklahoma – Ohio – Oregon – Pennsylvania – Rhode Island – South Carolina – South Dakota – Texas.
In addition, seven states have limited the scope of cuts or agreed to phase them in over a longer period, and four others are continuing to analyze their results.
AAHomecare took part in meetings with Medicaid authorities in 28 states and provided materials and guidance in 42 states. Of the 36 states that we worked with that were not at or below Medicare rates, 29 of them were influenced positively.
AAHomecare will work to keep rates stable in these states for 2019 and beyond and will seek opportunities to re-engage with state Medicaid authorities who chose to match the Medicare fee schedule. The Association will also be developing a toolkit of resources that state and regional associations can use in their engagement with legislators and regulators.
AAHomecare also plans to meet with CMS to discuss: implementation of the ESRD/DMEPOS Final Rule and extension of rural rates through 2020; the inability of the states to process claims by area type; and will also seek additional sub-regulatory guidance to allow for relief provided in the Final Rule to be utilized by Medicaid programs without further burden and cost to the states.
Other areas of focus in payer relations for the new year will include limiting the spread of sole-source and narrow network contract arrangements, along with beginning to establish relationships and develop strategies for representing HME interests with Medicare Advantage plans.
GAO Report Echos AAHomecare Data on Erosion of HME Supplier Base
WASHINGTON, DC – Last month, the Government Accountability Office (GAO), the federal legislative branch’s research arm, published a follow-up report to the July 2018 report on supplier number decreases. The December report, titled, “Medicare Fee-For-Service: Information on the Second Year of Nationwide Reduced Payment Rates for Durable Medical Equipment” shows that the number of DME suppliers continued to decrease in 2017. Suppliers furnishing rate-adjusted equipment in non-bid areas decreased by 11%, while beneficiary utilization decreased by 2% compared to 2016. The GAO found that since 2010, the number of suppliers furnishing rate-adjusted items decreased by almost 45% and suppliers furnishing non-adjusted items decreased by almost 25%.
The GAO’s findings align with AAHomecare’s supplier analysis, which shows an estimated decrease of 35% in the number of supplier companies between 2010-2018.