On Aug 24, the Government Accountability Office (GAO) released a report on the effects on reimbursement cuts in non-bid areas in the year following their implementation in January 2016.
On their highlights page of the report, GAO asserts that their findings “are consistent with CMS’s monitoring results, which indicate that there were no widespread effects on beneficiary access in the year after the adjusted rates went into effect.” They add that some impacts may take longer to become apparent, underscoring the importance of CMS’s continued monitoring activities.
In the report, GAO discounts input from stakeholders, including beneficiary groups, hospital organizations, and DME associations (which included AAHomecare), asserting patient access issues stemming from the cuts. GAO also questions the validity of studies from the DME industry that assessed the effects of rate reductions “on beneficiaries, DME suppliers, and others.”
We would assume the “others” they reference would include the highly credible input of 358 hospital case managers/discharge planners, more than 75% of whom said they “experienced difficulties with the ease and timeliness of the discharge process for patients who require HME since July 2016” ( from survey highlights of Impact of Competitive Bidding on Medicare Beneficiary Access to Durable Medical Equipment – Dobson DaVanzo Associates, October 2017).
Report Affirms Depth of Cuts and Impacts of Bidding Program on Supplier Numbers
The report does have two positive aspects. First of all, it confirms that payment rate decreases in non-bid areas are consistent with what our industry has been reporting: approximately 50% reductions since the new rates went into effect over the course of 2016. GAO’s report also tracks closely with our own findings on the significant erosion of the DME supplier base since the bidding program went into effect, with more than 35% losses in DME suppliers from 2010-2016, including an 8% drop from 2015 to 2016.
Findings in Stark Contrast to CMS Actions in IFR and Proposed Rule
The report’s assertion that there were no widespread effects on beneficiary access in the wake of significant cuts in non-bid areas contradicts recent affirmations of access issues by CMS. In the Interim Final Rule on non-CBA reimbursement rates released in May, CMS provided emergency relief to providers in rural non-CBA areas and noted problems with its monitoring efforts. In the recent ESRD/DMEPOS proposed rule, CMS acknowledges competitive bidding flaws, including the use of median bid pricing, and is delaying the next round of bidding until major fixes can be implemented. CMS is also proposing an extension of the relief in rural areas through 2020.
CMS’ language in these two recent rules, coupled with what hospital case managers, beneficiaries, and DME suppliers are saying about patient access problems, indicates that there are still major problems with the bidding program and non-bid area reimbursement rates that need to be addressed.
Report Underscores Need for Strong Industry Response on ESRD/DMEPOS Proposed Rule; Webinar on AAHomecare Comments Now Available
This new report from the GAO is a good example of why the HME community needs to make sure our priorities for the ESRD/DMEPOS Proposed Rule are taken into consideration. We urge you to share your comments with CMS about the impacts of the bidding program and rural reimbursement rates by Sept. 10.
In addition to the resources for sharing your comments noted below, we encourage you to view a recording of a webinar on AAHomecare’s comments on the Proposed Rule held last week for participants on AAHomcare councils for additional perspective.
- AAHomecare Comments on Proposed Rule submitted Aug. 20
- AAHomecare Alert on Proposed Rule Comments – provides an overview of our principal areas of focus
- Summary of Comments
- Submit your comments to CMS here by 11:59 pm, Monday, Sept. 10
