Bid Expansion Legislation Launched in Senate

S. 2312, the DME Access and Stabilization Act, would decrease expansion's impact on rural providers by altering pricing, timeline.

• By David Kopf
• Nov 19, 2015

Legislation has been launched in the Senate that would reform CMS’s nationwide expansion of competitive bidding rates to decrease the expansion’s negative impact on rural patients and providers.

Sens. Senators John Thune (R-S.D.) and Heidi Heitkamp (D-N.D.) launched S. 2312, the DME Access and Stabilization Act, recognizes that when CMS’s expands bidding nationally on Jan. 1, 2016, rural providers will be adversely affected more than other providers, because their market opportunities are dictated by their geography. If those providers are unable to find any additional volume to make up for the approximate 46 percent average cut to their reimbursement, their businesses could falter, which could in turn jeopardize their patients’ access to care.

In detail, CMS’s plan for national bid expansion will apply competitive bidding prices to claims for HME items currently covered Rounds One and Two of the program. An un-weighted average of all of the single payment amounts (SPAs) from the CBAs in each of the eight 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 of the current, un-adjusted fee schedule, plus 50 percent of the RSPAs. Then, on July 1, 2016, the rates will drop to fully implement the bidding-derived rates.

To combat that tight timeline and steep reimbursement cut, S. 2312 includes provisions that:

• Apply a 30 percent positive adjustment to rural single payment amounts (SPA) (calculated on a national basis) for suppliers in non-bid, “rural” areas as defined by CMS.
• Apply a 20 percent positive adjustment to regional single payment amount (RSPA) for suppliers in all other non-bid areas.
• Provide a two year phase-in period for bidding derived pricing for non-bid areas.
• Set the ceiling for future bidding rounds of the competitive bidding program at the unadjusted fee schedule rates in effect on Jan. 1, 2015, instead of CMS’ proposal to set a bid ceiling at the previous bid amount rates.
• Instruct CMS to revisit pricing adjustments for non-bid areas that takes into account travel distance, clearing price and other associated costs furnishing this equipment for prices that will be in effect on Jan. 1, 2019.
• Effective Jan. 1, 2020, new Medicaid allowable caps will be applied to the Federal portion of reimbursement that mirror the Medicare rates. The rates for suppliers in competitive bid areas will match the Competitive Bidding Single Price Amounts (SPA), for rural areas will match the new rural single payment amounts (SPA+30 percent) calculated on a national basis, and for all other regions will match the new regional single payment amounts (RSPA+20 percent).

Additional co-sponsors at introduction included Sens. Pat Roberts (R-Kan.), Angus King (I-Maine), and Mike Crapo (R-Idaho). 

Similar legislation is expected to be introduced in the House soon, according to a statement from AAHomecare. In the meantime, AAHomecare is calling on providers to help drum up support for the bill. 

 “I urge HME providers, manufacturers and other stakeholders in our industry to express their support for this legislation to their Senators as soon as possible,” Ryan said.