AAHomecare Underscores Budget Concerns

Association underscores three primary concerns regarding President’s 2021 proposed budget, and lists a total 15 aspects of the budget that impact or relate to HME.

A week after releasing an initial review of the White House’s budget proposal for 2021, a statement released this week by the American Association for Homecare emphasized three primary concerns it has about the budget:

  • Expansion of competitive bidding and a new way to determine single payment amounts.
  • Use of retail price information for DME fee schedule rates.
  • The creation of a benefits manager for DME items that have a monthly rentals or require regular refill of supplies.

Those three items were part of a list of 15 provisions in the budget AAHomecare identified as impacting HME or that were related to HME.

Expansion of Competitive Bidding

The 2021 budget proposes that starting in 2024, single payment amounts will be based on individual winning bidder’s bid amount (rather than the maximum winning bid methodology employed in Round 2021). It also expands competitive bidding to other geographic areas, including rural areas. This item was included in the previous year’s budget, but this time it includes a timeframe.

“This would not only mean that suppliers serving rural areas will have to participate in bidding, causing additional administrative burden for the supplier community, but there will also potentially be multiple different SPAs for a single item depending on the supplier, which will add further complexities to the already-complicated program,” the AAHomecare statement read.

“While this proposal has been included in previous fiscal year budgets going back to 2018, this is the first time that a target date (2024) was included,” it continued. “Adding a timeframe to the proposal signifies that the Administration has a plan to implement this proposal. AAHomecare has communicated previously to the Administration on the concerns with the expansion of CBP and we have already started a dialogue on the issue with key Congressional offices.”

Use Of Retail Prices for DME Fee Schedules

The budget would use available retail prices to create the DME fee schedules. This would negatively impact DME prices for items that aren’t even part of competitive bidding. Also, this methodology does not take into account the associated services that Medicare DME suppliers offer.

This could significantly lower the current Medicare rates for items including medical supplies, invasive ventilators, orthotics, and CRT items, according to AAHomecare.

“Using retail-based pricing does not take into account the additional service, billing, and compliance requirements associated with serving Medicare beneficiaries,” the association’s statement read. “Because this proposal is projected to save Medicare $1.6 billion, the concept will be attractive to be used as a pay-for for another legislative initiative.”

Benefits Manager for Rental, Refill Items

Lastly, the budget would create a benefits manager for DME items that have monthly rentals or require a regular refill of supplies.

The recommendation has been included in previous budgets, but AAHomecare noted that “This is of great concern to the industry because this would essentially add a new layer of red tape between the supplier and beneficiaries, potentially increasing supplier administrative burden and affecting patient access to HME.”

About the Author

David Kopf is the Publisher and Executive Editor of HME Business and DME Pharmacy magazines. Follow him on Twitter at @postacutenews.

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