CMS Releases Bidding Expansion, Bundling Final Rule

Medicare will phase in bundling; finalizes rural pricing method; starts adjusted bidding pricing on Jan. 1, 2016.

After releasing a proposed rule in July, CMS has released its final rule that will expand competitive by 2016, as well as implement bundling for specific types of DME that fall under the bid program.

To begin with, new adjusted pricing for DMEPOS competitive bidding items will begin on Jan. 1, 2016. This will be a phase-in process over six months, with allowables to be reduced by 50 percent on Jan. 1 2016, and 100 percent on July 1, 2016.

As part of the move to expand competitive bidding nationally, CMS finalized a methodology for bringing competitive bidding prices to non-competitive bidding areas, such as rural areas.

In that regard, CMS will define rural areas as a postal zip code that has more than 50 percent of its geographic area outside of a metropolitan statistical area (MSA) or a zip code that has a low population density that was excluded from a competitive bidding area. The payment amount for those rural areas will be 110 percent of the average of the single payment amounts of all the areas where competitive bid prices are implemented.

Also, CMS will proceed with a limited version of its proposed bundling to phase-in the program. CMS will start with bundling for power wheelchairs and CPAP in up to 12 markets. The monthly bundled rate will include payment for all items and service, including maintenance of the equipment, and replacement of supplies. Comparative markets will be established to compare outcomes. For now, CMS will not move forward with bundling for oxygen, standard manual wheelchairs, enteral nutrition, respiratory assist devices, and hospital beds

The final rule is the last step in the regulatory process that CMS began earlier this year via an Advanced Notice of Proposed Rule Making (ANPRM) and continued with the proposed rule, CMS-1614-P, released in July. In response, AAHomecare has reported it has convened a working group of member company leaders to analyze and reply to these regrettable proposals, the main points of which are summarized below.

Some important links:

  • The final rule was longer than 500 pages. To help the industry study the document, the American Association for Homecare created a condensed version consisting of the segments related to HME, which is available as a PDF file.

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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