The American Association for Homecare (AAHomecare) has submitted its official comments on Medicare competitive bidding and accreditation recommendations listed in the calendar year 2026 home health proposed rule.
AAHomecare addressed the 45-page document to Centers for Medicare & Medicaid Services (CMS) Administrator Mehmet Oz, M.D., on Aug. 27.
Competitive bidding proposals conflict with previous Trump administration orders
AAHomecare said recommendations for competitive bidding for durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) are in direct conflict with the Trump administration’s executive orders 14192 and 14267 — Unleashing Prosperity Through Deregulation, and Reducing Anti-Competitive Regulatory Barriers, respectively.
AAHomecare also said the new proposals “eliminate several of the important guardrails that the previous Trump administration implemented that would establish a more financially sustainable competitive bidding program. … We urge CMS to maintain those guardrails.”
In fact, AAHomecare repeatedly pointed out that the new proposals seem to ignore what CMS learned from past competitive bidding rounds and demonstrations.
In saying that CMS has “exceeded its authority” by recommending that ostomy, urological and tracheostomy supplies be added to the competitive bidding program, AAHomecare said, “A prior bidding demonstration that included urological supplies found that medical supplies are not suited for competitive bidding due to beneficiary access and product quality issues.”
And while the proposed rule wants to return insulin infusion pumps to the competitive bidding program, AAHomecare said, “CMS previously included insulin infusion pumps and determined that they were not suited for competitive bidding, especially considering the fragile patient population that requires such therapy.”
AAHomecare also recommended excluding continuous glucose monitors (CGMs) from competitive bidding “as this is a relatively new technology with [a] very limited number of manufacturers. The addition of CGMs will introduce access barriers, administrative burden on suppliers, and stifle innovation.”
And the association said CMS should exclude liquid oxygen from competitive bidding because liquid oxygen “is exceedingly costly to provide, and very few beneficiaries have a medical need for this type of oxygen therapy.”
Competitive bidding and funding policies
AAHomecare also objected to a number of reimbursement-related recommendations in the proposed rule.
The organization said allowing bidders to bid on individual HCPCS codes would more accurately reflect market pricing, vs. CMS’s proposal to use lead item bidding.
“The fundamental flaw with the lead item bidding/pricing methodology is that it assumes there is a rational relationship in the relative Medicare payment amounts for items within a product category,” AAHomecare said. “This is simply not true. The lead item bidding results in disproportionate payment cuts to non-lead items.”
AAHomecare also said winning bidders should be reimbursed at the rates they bid. “If CMS moves ahead with a uniform payment amount for all bidders, CMS should maintain the current methodology for determining the single payment amount [SPA] at the clearing price.”
In an Aug. 6 AAHomecare webinar, Cara Bachenheimer, AAHomecare’s general counsel from Brown & Fortunato, defined the clearing price as the price offered by the final supplier who wins a contract. “Clearing price methodology is typically the standard in auctions, because it doesn’t make any sense to pay a bidder less than their best price,” Bachenheimer said.
But the proposed rule recommends reducing the SPA from the maximum winning bid to the 75th-percentile winning bid.
During that Aug. 6 webinar, Mina Uehara, AAHomecare’s senior director of regulatory affairs, said CMS proposed the 75th-percentile rule “because they did see a significant increase in costs with using the clearing price in the proposed rule. They estimated about a $1.2 billion increase in payments, and so that is the reason they’re trying to artificially lower the winning bid.”
As for the winning suppliers themselves, AAHomecare urged CMS to be sure those suppliers will be able to serve beneficiaries effectively without endangering access to medically necessary home medical equipment.
“CMS must consider DME supplier experience in a geographic area and product category, capacity, and whether the bids are bona fide when awarding contracts,” the association said. “CMS must require bidders to have sufficient cash flow to expand to fulfill contracts. Failing to maintain the safeguards put in place due to lessons learned from earlier rounds of the CBP [competitive bidding program] risks a return to the problems of unrealistically low bids that were submitted without viable plans or experience with specific products to serve beneficiaries.”
AAHomecare described CMS’s plan to determine the number of winning suppliers as “arbitrary” and ultimately “designed solely to eliminate most DMEPOS suppliers from the market. The proposal does not take into account supplier capacity and beneficiary demand.”
Commenting on the annual accreditation proposal
The proposed rule wants to require DMEPOS suppliers to be accredited every year rather than every third year, as is currently the case.
“Annual re-accreditation is not warranted, overly burdensome, and simply not feasible or practical,” AAHomecare said in its comment. “The accreditation process is designed to determine compliance with Medicare quality standards; it is not a Medicare regulatory compliance process.”
AAHomecare added that the proposed rule seeks to change “the objective” of accreditation, which the organization said “is to ensure that a DMEPOS supplier is in compliance with the Medicare quality standards. This is separate and distinct from compliance with laws such as the False Claims Act, Stark and Federal anti-kickback law, and Medicare billing requirements. The AOs [accrediting organizations] are not equipped with surveyors who are lawyers or billing specialists; nor are they law enforcement officers on behalf of CMS.”
Annual accreditation would be “impossible to implement,” AAHomecare added. “From a feasibility perspective, the larger DMEPOS suppliers would engage at least two surveyors every single business day of the year, in order to effectuate this proposed requirement. From a cost perspective, CMS has grossly underestimated the cost to DME suppliers of this proposed requirement.”
A DMEPOS supplier with one location would incur additional direct costs of approximately $1500 per year if accreditation becomes an annual requirement, AAHomecare said. Suppliers with multiple offices would incur even greater costs. All suppliers would also face costs beyond financial ones, AAHomecare noted.
“All DME supplier survey respondents indicate a need for significant additional employee resources if surveys were to be on an annual basis,” the association said. “CMS’s estimate in its regulatory impact statement significantly understates the cost impact to the DMEPOS industry.”
AAHomecare said that CMS could confront fraud, waste and abuse using other means.
“For example, CMS could establish effective lines of communication between AOs and CMS so that when an AO has a suspicion of fraud, waste or abuse, it can easily communicate the issue to CMS, and an appropriate enforcement entity can pursue the issue,” AAHomecare said. “For DMEPOS suppliers, there are viable alternative methods to better ensure that suppliers are not engaging in fraud, waste and abuse. For example, CMS could mandate that all DMEPOS suppliers have compliance programs in place to ‘self-monitor.’ This, along with the triennial accreditation assessment, with spot checks in between years if needed, would better ensure compliance.”
The home health proposed rule was published in the Federal Register on July 2. The public comments period ended Aug. 29.
