CMS's Round 2021 Surprise
If CMS's decision to punt on 13 categories left you feeling left out in Limbo, it's good news. Sort of.
- By David Kopf
- Dec 01, 2020
Right before Halloween, after weeks of radio silence, CMS finally
announced Round 2021 as well as its proposed
rule concerning rural providers. The proposed rule
had some good news for rural providers (although
it still needs some changes), but the Round 2021
announcement was particularly surprising: After
originally taking bids for 16 product categories in
the 130 competitive bid areas of Round 2021 of its
competitive bidding program, CMS has announced
that it was only awarding contracts for the off-the-shelf
back and knees braces categories.
As for the 13 remaining categories (CMS had
already removed the non-invasive ventilator
category due to the COVID-19 public health
emergency), CMS announced it would not issue
contracts. In other words, it decided to punt.
For the OTS back and knees braces categories,
CMS has released the single payment amounts,
which used Round 2021’s lead item pricing methodology.
The agency said it made contract offers
in 127 CBAs for the two categories and expects
to save $600 million over the three-year Round
2021 contract period. That claim requires review,
because, as Tom Ryan, president and CEO of the
American Association for Homecare, noted in a
recent HME Business Podcast interview, there are
some wide geographic swings in the pricing for
But let’s get back to those 13 categories.
Essentially CMS was pressing pause on the
program because, as it stated, it “did not achieve
expected savings.” In other words, what CMS was
telling DMEPOS stakeholders is that it had reached
the floor in terms of reimbursement. That’s both
good news and possibly bad news. Maybe we
should call it confusing news?
Let’s review: The last competitive bidding
contracts expired Dec. 31, 2018, and since then,
the program has been dormant, with any qualified
DMEPOS supplier serving Medicare beneficiaries.
While most in the industry expected that gap to
exist for a maximum of 24 months, it appears that
gap presumably has no foreseeable end with CMS’s
latest Round 2021 announcement.
The prevailing question that CMS’s statement
elicited was, how will reimbursement for the 13
categories that CMS opted not to compete work
and will current rates still apply?
It appears that for the foreseeable future, that
is indeed the case: the current rates will apply.
DMEPOS providers will continue to provide these
13 categories without contracts. That’s good news
as it means that HME providers will continue to
help patients just like they’ve been doing under
the competitive bidding program’s long-running
dormancy. That’s good news not only for providers
but for U.S. healthcare in general. We’re in the
middle of a pandemic, and the last thing we need
is massive upheaval when it comes to front-line
medical equipment providers.
But, as I mentioned, CMS will continue reimbursing
items in the 13 categories using the
previous single payment amounts. That’s not
exactly ideal given that those bid amounts were
generated literally years ago. A whole lot has
changed during COVID-19, and providers' operating
structures have become more complex, and
in many cases, more expensive.
Moreover, CMS shouldn’t expect that DMEPOS
suppliers will be satisfied to work at basement-level
prices on an open-ended basis. Moreover, even
with Producer or Consumer Price Index adjustments,
I still don’t see that arrangement as tenable.
Also, what about price increases? With the lead
item pricing in place for the first time with Round
2021, we could have seen an upward shift in single
payment amounts for some items. Who knows? All
we have is CMS’s statement that it didn’t achieve
any savings. Are bid systems only allowed to go
down? Since when? How do we know what the
actual single payment amounts would have been
without CMS releasing the information?
Fortunately, a few days after CMS’s announcement,
the American Association for Homecare
started pressing CMS on the transparency of the
bid amounts. This is a pivotal issue, and I’m sure
everyone in the industry is eager to know how the
bids came in. In the meantime, let’s take the “W”
at least when it comes to the fact that competitive
bidding remains on hiatus.
This article originally appeared in the Nov/Dec 2020 issue of HME Business.
David Kopf is the Publisher HME Business, DME Pharmacy and Mobility Management magazines. He was Executive Editor of HME Business and DME Pharmacy from 2008 to 2023. Follow him on LinkedIn at linkedin.com/in/dkopf/ and on Twitter at @postacutenews.