CMS Proposes Market Oriented Reforms for Competitive Bidding Program

A new CMS proposed rule would revise the national competitive bidding program with a blend of smaller, short-term tweaks and larger, more structural changes; provides longer relief for rural and non-competitive bid area providers; and addresses oxygen reimbursement.

The Centers for Medicare & Medicaid Services took steps toward changing Medicare’s DME fee schedule payments, proposing market-oriented reforms to the durable medical equipment prosthetics, orthotics and supplies competitive bidding program.

Other proposed bidding changes include:

• To address any lapses in competitive bidding contracts after Dec. 31, starting Jan. 1, 2019  and until new contracts are awarded under the DMEPOS competitive bidding program, beneficiaries may receive DMEPOS items from any Medicare enrolled DMEPOS supplier.
• CBA pricing will be subject to annual consumer price index (CPI) adjustments until the next bidding round takes place.
• The process for re-competing contracts with suppliers currently in effect under the DMEPOS competitive bidding program has not been initiated, according CMS. As a result, CMS notes that the current contracts for the DMEPOS CBP will expire on December 31, 2018.

Proposed rural relief changes include:

• The proposed rule would extend the 50/50 blended rate reimbursement rates for rural and non-contiguous areas  provided in CMS’s May IFR through Dec. 31, 2020.
• CMS will continue monitoring healthcare outcomes data and information in order to amend how it sets rates in the future.

On adjustments to fee schedule amounts, the rule proposes:

Transitional fee schedule adjustments for DMEPOS items and services furnished on or after January 1, 2019.

(1) One fee schedule adjustment methodology for DME items and services furnished on or after January 1, 2019, in areas that are currently CBAs, in the event of a gap in the CBP;

(2) Another fee schedule adjustment methodology for items and services furnished from January 1, 2019, through December 31, 2020, in areas that are currently not CBAs and are either rural areas or non-contiguous areas.

Adjustments to the DMEPOS fee schedule will account for just over $1 billion in Medicare payments and $260 million in Medicare beneficiary cost sharing for the two-year period beginning January 1, 2019 and ending December 31, 2020.

On competitive bidding, the rule proposes:

• Implementing lead item pricing based on maximum winning bid amounts.
• Revising the definition of bid to mean an offer to furnish an item or items for a particular price and time period that includes, where appropriate, any services that are directly related to the furnishing of the item or items.
• The definition of composite bid to mean the bid submitted by the supplier for the lead item in the product category.
• Revision of lead item to mean the item in a product category with multiple items with the highest total nationwide Medicare allowed charges of any item in the product category prior to each competition.

A fact sheet is available at go.cms.gov/2zx1tsy and a PDF of the full text of the proposed rule is available at bit.ly/2usWXFF.