WASHINGTON, DC – Five weeks ago, CMS took HME Medicare reimbursement policy in an unexpected direction by scrapping Round 2021 for all products except braces. Reactions range from great relief to serious disappointment; I’ve had conversations and email exchanges with individuals from all points along that spectrum and have taken in reactions in HME trade press articles and on social media.
I believe that the decision not to move forward with Round 2021 is, on balance, a positive development for HME – and that viewpoint is shared by most of the individuals in the Association’s leadership. Allowing all suppliers in 130 CBAs to continue to serve Medicare beneficiaries in their communities through the duration of this pandemic and over the next three years provides security for suppliers and patients alike.
At the same time, I understand the disappointment of suppliers who suspect that the rates may have increased under Round 2021 and thought that such increases would have been worth the inherent risk of the program moving forward and not “winning” bids. A decade of the bidding program has resulted in too-narrow margins for a business category that requires high levels of specialized skills and expertise as well as a challenging regulatory environment. It’s clear that our industry needs to push rates in the other direction, and AAHomecare is determined to unite HME stakeholders to use this pause in the bidding program as a springboard to making that happen.
Transparency on Round 2021 Needed
In a call with CMS officials in early November, we asked for CPI increases across all categories starting January 1, 2021, and we were assured that these adjustments will be made. We also asked CMS to provide 2021 bidding results and have followed up with a formal request for that information. While many in the HME industry anticipate that the lead item clearing price would have likely gone up under Round 2021, we do not yet have any confirmation that rates would actually increase; all we have is CMS’ statement that they have paused the program because “payment amounts did not achieve expected savings.” No matter what the results, bidders have a right to know how they would have fared, and we hope to be able to share that information widely.
Those CPI increases are welcome, but AAHomecare is not content to simply accept status quo for the next two to three years. Those bid results, if appreciably higher, will underpin our case with policymakers for more sustainable rates – as will additional information on the new cost structure and operating environment HME may be facing even after the COVID-19 pandemic is finally over.
To summarize: even though bidding is essentially paused for the next three years, AAHomecare is not planning on standing pat on Medicare rate policy over that period.
Moving Beyond Bidding
With the CB program on hold and CMS perhaps coming to the realization that there are not any further significant savings that can be found through bidding, we have an unexpected opportunity to work with policymakers, patient groups, and clinicians to develop a better path forward. For the first time in a decade, we have an opening to move away from a rate-setting scheme that is predicated on finding lowest possible reimbursement rates that a segment of HME suppliers will accept while also reducing access and patient choice.
For the last decade, the HME industry has collectively railed against a Medicare reimbursement methodology that has reduced the supplier base by about 40% and has cut margins to the bone for many products. Thanks to the cancellation of most of Round 2021, we have a chance to work towards a sensible, sustainable alternative.
Of course, developing a pricing approach that is broadly supported by the HME sector and palatable to policymakers will be a monumental undertaking, but I believe it’s a path we need to explore unless we’re ready to accept another decade or more of the bidding program.
Tom Ryan is president and CEO of the American Association for Homecare.
AAHomecare Leaders Share Their Perspectives
Bill Guidetti – AAHomecare Chairman and President, East Division for Apria Healthcare: In addition to addressing price transparency and eliminating competitive bidding altogether, we have important opportunities to address issues related to utilization management (UM) rules, Telehealth, and e-Prescribing. The HME industry has proved its value during the pandemic to be instrumental in transitioning patients from the epicenter of the crisis—from hospitals to home—as a vital part of the healthcare continuum. However, onerous documentation requirements make it extremely difficult for HME companies to provide care in an expeditious manner for qualified patients.
The HME sector needs relief from burdensome UM regulations that suppress utilization for qualified patients who deserve to be treated at home which is a fraction of the cost as compared to in-patient hospital care. Also, with the advent of e-Prescribing and Telehealth, both should be recognized, validated, and reimbursed to help the HME industry better serve our patients remotely. The aforementioned would provide efficiencies and accurate claims adjudication for CMS and suppliers. The future of healthcare is here now, and HME must be a part of it!
Gary Sheehan – AAHomecare Vice Chair and CEO of Spiro Health: The Association is confident this first step towards a rational payment policy is a good one. However, we are nowhere near done trying to undo the damage CMS has brought on the HME sector through failed policies the last decade plus. The services our member companies provide are an invaluable part of the U.S. healthcare delivery system and have been a key part of the ongoing response to the COVID-19 pandemic. Existing and prospective AAHomecare members can be assured the Association will continue to fight for fair policies and reimbursement and to ensure that the HME sector is recognized for its increasingly important work providing clinically proven and patient-preferred home-based care to millions of Americans.
