Industry Keeps up Fight Against Bid Expansion

As Jan. 1 expansion date approaches, providers and associations advance legislation to reform CMS’s plan.

As the Jan. 1, 2016 date for the national expansion of competitive bidding looms large, industry associations, legislative experts and providers advocates are working furiously to advance legislation that would reform the expansion.

The key piece of legislation on the books that would protect providers — and especially rural providers — from the expansion is S. 2312, the DME Access and Stabilization Act. Launched by Sens. Senators John Thune (R-S.D.) and Heidi Heitkamp (D-N.D.), S. 2312 would lengthen the timeline of implementation and alter the reimbursement scheme in order to decrease the negative impact on rural providers, in particular.

CMS’s Plan

When CMS’s expands bidding nationally on Jan. 1, 2016, rural providers — along with providers in non-bid areas — will face an approximate 46 percent average cut to their reimbursement. However, rural providers have fewer options because their market opportunities are dictated by their geography. If those providers are unable to find any additional volume to make up for the, their businesses could falter, which could in turn jeopardize their patients’ access to care.

Under CMS’s expansion plan, competitive bidding prices would be applied to DME claims in areas not covered Rounds One and Two of the program. An un-weighted average of all of the single payment amounts (SPAs) from the CBAs in eight regions would 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 percent 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.

The Industry’s Reforms

The net effect is a serious series of cuts staggered across a very short timetable. S. 2312 would reform the expansion to:

  • 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).

As for House companion legislation, Reps. Tom Price (R-Ga.) and Tammy Duckworth (D-Ill.) have been identified as the champions for advancing a bill in the lower chamber, but so far, no House bill has been introduced.

CRT Legislation

In addition to S. 2312, two bills were launched in the House and Senate to protect complex rehab accessories from CMS’s Jan. 1, 2016 implementation of nationwide expansion of competitive bidding are making progress.

The bills provide a technical correction that restricts CMS from applying Medicare competitive bidding program pricing to the accessories used with complex rehab wheelchairs.

H.R. 3229 introduced into the House in July by Rep. Lee Zeldin (R-N.Y.), now has 65 co-sponsors. S.2196, introduced the Senate by Sen. Robert Casey (D-Pa.) with Sens. Rob Portman (R-Ohio), Chuck Schumer (D-N.Y.) and Thad Cochran (R-Miss.) attached, now has eight co-sponsors.

Call to Action

Now the fight to reform the expansion has entered the eleventh hour. If the industry wants to have any hope of attaching legislative language from the rural bidding-relief bill and the CRT accessories bills to Federal debt ceiling legislation, it must act before Dec. 11, which is the date by which Congress must act in order to avoid another government shutdown.

Bearing that in mind, state associations and the American Association for Homecare are calling on providers to advocate on behalf of the legislation.The association offered various ways providers can help advance the legislation:

  • They can also ask for the name and email address of their lawmakers’ aide who handles healthcare legislation, and follow up with an email to those staffers.  

“Whether you’ve already been in repeated contact with your Congressional representatives on these issues, or if you’re a relative newcomer to advocacy efforts, or your level of lobbying engagement lies somewhere in between, we need your help reinforcing the need for Capitol Hill action before CMS’ new plans expand the reach of the bidding program go into effect on January 1, 2016,” Read a statement from AAHomecare.

About the Author

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 and on Twitter at @postacutenews.

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