AAHomecare Asks HHS to Repeal Full Bid Expansion Rates

Letter from association asks HHS Secretary Tom Price to set rates for rural/non-bid areas at the 50-50, phase-in rates.

The American Association for Homecare sent a letter to HHS Secretary Tom Price asking for CMS to immediately repeal the full competitive bidding expansion rate cuts currently being applied to providers and patients in non-bid areas, and replace them with something more sustainable.

“We believe we can work within the regulatory environment to get a lot of changes made,” said AAHomecare President and CEO Tom Ryan, during his Feb. 28 Washington Update address at Medtrade Spring in Las Vegas. “We believe that because we have an HHS Secretary that understands this industry. So, we’re working with the agency to recommend a short-term fix.”

Specifically, the 11-page letter calls for CMS to issue an Interim Final Rule (IFR) that would repeal the full rate reductions in non-CBAs that were originally applied on July 1, 2016. The application of those rates was temporarily delayed by the CURES Acton retroactive basis for claims dating back to July 1, and then re-implemented on Jan. 1.

Per the the letter's recommendation, DMEPOS claims in non-bid areas impacted by the national expansion would instead be reimbursed per the blended rate that was in effect during Jan. 1, 2016 to June 30, 2016. That rate would then be in place until the 2019 re-rulemaking for competitive bidding.

The letter goes into considerable detail regarding the negative impact that national bid expansion and CMS’s rate structure have had on patients and providers, particularly those in rural areas.

“It is still too soon to have accurate figures on suppliers’ sales and closures in response to the adjusted rates, but we know from CMS data that there are 38 percent fewer suppliers enrolled in Medicare today than there were in 2013,” the letter notes. “Given the unprecedented magnitude of the payment cuts under the adjusted rates, it is reasonable to expect a high rate of supplier attrition in non-CBAs if adjusted rates remain at current levels.”

The letter also highlights that CMS has failed to provide a Congressionally-mandated report on the impact of those rates. Ryan noted that the agency hasn’t released a report on the sustainability of the program since 2011.

“I know for a fact that there’s stand of care change going on out there,” Ryan added. “We’re seeing a decimation of the infrastructure of this industry, because of these unsustainable reimbursement rates; and we’re seeing seeing upward of a 38 percent decrease in PTAN numbers over the last several years. That’s a problem and of course for rural America it’s really going to be a problem”

In addition to the letter it just sent to Secretary Price, Ryan added that AAHomecare would soon send an additional letter outlining a laundry list of reforms that the industry would like to see CMS use its considerable authority and oversight of competitive bidding to make to the program. These reforms include using the clearing price; boosting program transparency; setting sustainable capacity levels; removing bundling; separating mismatched categories such as sleep and oxygen; and better ways to transition patients between providers when those patients move or travel. 

Ryan stressed that the industry is in an excellent potion to work with HHS and CMS on a regulatory basis — rather than have to fight it on a legislative level — thanks to Price's presence as Secretary of HHS.

“Twenty-seventeen is a year of unprecedented opportunity for the home medical equipment industry,” Ryan said. “I'm feeling excited about the fact that we can potentially move the needle a little this year. Twenty-seventeen is our year and it's about time.”

About the Author

David Kopf is the Publisher and Executive Editor of HME Business and DME Pharmacy magazines. Follow him on LinkedIn at linkedin.com/in/dkopf/ and on Twitter at @postacutenews.

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