Various stakeholders, including the American Association for Homecare leadership, state associations and vendors, have chosen a course to advocate for freezing the “phase-in” rates being applied to non-bid areas as part of the competitive bidding expansion that was implemented on Jan. 1.
What the phase-in rates refer to is, that that CMS’s implementation phases in the bid program expansion over course of 2016 using various rate formula along the way.
To being with, CMS took zip codes in the eight regions and classified them as either rural or non-rural. An un-weighted average of all of the single payment amounts (SPAs) from the CBAs for the items covered in the various product categories will be used to determine a regional single payment amount (RSPA) for each covered item.
From Jan. 1, 2016 to June 30, 2016, reimbursement for affected product categories will be based on 50 percent of the un-adjusted, non-bid fee schedule, plus 50 percent of the RSPAs, with claims in the rural zip codes receiving a 10 percent increase. Then, on July 1, 2016, the rates will drop to fully implement the bidding-derived rates.
The American Association for Homecare reported that since the start of the New Year, its leadership has engaged leading companies and associations in the HME sector to outline a strategy to get relief for companies in rural areas, as well as those in other non-bid areas, now subject to Medicare competitive bidding-derived pricing.
The strategy those stakeholders landed on was to advocate for freezing the expansion rates at their current, 50-50 phase-in rates (the rates that are currently slated from Jan. 1 to June 30).
“While these initial phase-in cuts will certainly cause financial hardships for HME suppliers in rural/non-bid areas, we believe that working to prevent planned subsequent cuts that could reduce prices for many items by as much as 45 percent is the best approach to keep these suppliers afloat and help maintain access to critical products and services in less densely populated areas,” a statement from AAHomecare read. “In preliminary discussions, our champions in both the House and Senate have reacted positively to this proposal as a realistic course of action to get legislation passed this year.
“In addition, we hope to engage CMS to consider freezing the rates at the current phase-in levels beyond the six month period before further cuts take place,” the statement continued. “We believe that this approach represents the best chance to keep the deepest and most damaging cuts from wreaking further havoc on rural/non-bid HME suppliers.”
The association stated it will share more about its plans in coming weeks, and that it anticipated working with its members and the rest of the HME industry to generate grassroots support and Congressional action on this issue.