A new proposed rule from CMS includes several provisions that would alter the competitive bidding program, the most notable of which is a provision that would change the bid ceiling to the 2015 fee schedule.
The rule proposes that the bid ceilings for items in future rounds of competitive bidding would be based on the fee schedule rates that were set for them before they were adjusted based on previous rounds competitive bidding. The industry reaction to such an unexpected proposal was a mixture of surprise, appreciation and relief.
“It’s significant,” said Tom Ryan president and CEO of the American Association for Homecare. “It appears that in the comments to the proposed rule that they [CMS] finally listened to us; that the ceiling was outrageous and wasn’t going to work for sustainable program. So we’re very happy to see that.”
“It’s unbelievable,” said Cara Bachenheimer, senior vice president of government relations for Invacare Corp. “The CMS proposal is significantly better than what we were able to get in the Senate bill. … The Senate bill changed it so the bid ceiling could be no less than the July 1, 2016 payment rates. The CMS proposed rule backs it up to the 2015 fee schedule, which is huge.”
Also notable was the language CMS used to explain why it was proposing the change:
“This would avoid a downward trend where the new, lower bid limits apply to each subsequent round of bidding based on fee schedule rates adjusted using bidding information from the previous round,” CMS explained in a public statement. “This would help to enhance the long term viability of the program and would allow suppliers to take into account both decreases and increases in costs in determining their bids, while ensuring that payments under the program do not exceed the amounts that would otherwise be paid had the DMEPOS CBP not been implemented.”
“That’s definitely something that we’ve [the industry] been saying,” said Jay Witter, vice president of government affairs for AAHomecare. “You can’t have the program be sustainable if you keep driving the ceiling into the ground.”
“It’s almost as though we were saying it,” Bachenheimer added. “I couldn’t have said it better than CMS!”
Besides the obvious benefit of having the bid ceiling set to pre-bid fee schedules, the proposed rule also removes a bone of contention from the negotiations happening between House and Senate lawmakers trying to agree on rural relief legislation by July 15, before they go on recess. The bid ceiling was a sticking point for some lawmakers in the House, when it came to rural relief legislation.
“There were a number of democrats in the House who didn’t like the bid ceiling proposal,” Bachenheimer noted. “So that issue is off the table from a Capitol Hill perspective.”
In terms of timing, if the proposed rule follows the normal process of public commentary and finalization, it should be implemented well in advance of the next re-bid.
“The next time we have to worry about bidding is January 2018,” Ryan noted. “The whole process will have gone through by then.”
In addition to the bid ceiling the proposed rule also contains other key bidding provisions:
- A requirement for bidding providers to obtain an authorized bid surety bond for each CBA associated with their bid. CMS proposes that the bid surety bond, set at $100,000, indicate the CBA specific to that bond.
- A rule that contracts will not be awarded to a bidding entity unless the entity meets applicable state licensure requirements.
- An appeals process for a breach of contract actions that expands the CMS regulations to include an appeals process for all breach of contract actions that CMS may take, rather than just for contract termination actions.
- A proposal to revise inverted prices for similar items with different features under competitive bidding prior to adjusting fee schedule amounts paid in non-competitive bidding areas