AAHomecare: ESRD Rule Needs Work

Association president outlines where CMS’s proposed changes to bidding help HME and where they fall short.

Now that CMS’s new proposed rule for ESRD and DMEPOS competitive bidding has been around for a week, the American Association for Homecare has released some perspective on the advantages and the shortcomings of the proposed rule.

In general terms, the rule would revise the national competitive bidding program with a blend of smaller, short-term tweaks and larger, more structural changes; provides longer relief for rural and non-competitive bid area (CBA) providers; and addresses oxygen reimbursement.

In terms of positives, the proposed rule gives rural suppliers sustained reimbursement rate relief through 2020, which will effectively put $1.3 billion more into rural providers’ budgets, according to AAHomecare’s President and CEO Tom Ryan, who released his perspectives on the rule this week.

“After two decades of reductions to the HME benefit, including staggering cuts stemming from MIPPA and the bidding program over the last 10 years, this is a welcome and long-overdue change of course from the agency,” he wrote, highlighting another key change another key competitive bid program AAHomecare had worked for years to advance. “But perhaps more importantly, CMS is recognizing that the use of median bid pricing threatened the ongoing viability of the bidding program, and that basing payment amounts on the maximum winning bid would enhance the long-term sustainability of the program.”

Ryan added that the move indicates CMS is finally heeding the industry’s concerns about bidding.

“It’s clear that the HME community has earned considerable credibility at HHS and CMS and that the leadership at these agencies realize that providers and the patients we serve are threatened by unsustainable Medicare reimbursement policy,” he noted.

That said, Ryan noted there are important aspects of the rule that “fall short” in terms of the industry’s objectives.

For starters, the proposed rule doesn’t give relieve to providers in non-bidding areas that aren’t rural and aren’t in Alaska, Hawaii or American territories. CMS cited a lack of claims data since July 2016 indicating patients in these areas were having insufficient access to HME or suffering adverse health effects as a result. Also, CMS is “taking issue” with the industry’s position that the travel and delivery costs in non-CBA areas are higher than in the CBAs. That said, Ryan offered a way forward.

“While CMS is not providing relief for this non-bid cohort, they note that they will continue to monitor this area closely and ask for ‘specific comments on the issue of whether the 50/50 blended rates should apply to these areas, as well,’” Ryan noted. “We believe a strong response on this issue from HME stakeholder groups and providers in these non-bid areas in the comment period is especially important.”

Another problem with the proposed rule is CMS’s plan to apply the 2006-era budget neutrality offset to stationary oxygen equipment to all classes of oxygen equipment starting January 2019.

“While this would have the effect of providing some relief on stationary oxygen, it merely shifts the effects of this outdated provision elsewhere,” Ryan stated. “In addition, CMS is proposing payment rates for liquid oxygen that don’t come close to covering the high costs of furnishing that equipment.”

Ryan said AAHomecare will work with various respiratory stakeholders — including clinicians — to fight the liquid oxygen changes.

But Ryan stressed that the reforms were “substantial” and said the rule indicates that CMS is taking a new approach for handling HME.

“I believe this change is taking place on account of both the new leadership at the Agencies as well as the strong and united advocacy efforts from the HME community over the last few years,” he said. “The work that so many of you have put into educating and engaging Capitol Hill on these issues has had a tremendous impact on the process; I would never have expected as much Congressional outreach to CMS, HHS, and OMB on our issues as we have seen from 2016 forward.”

In terms of next steps, Ryan said AAHomecare is developing its public comments on the rule for the Sept. 10 deadline and will share recommendations for what individuals and businesses in the HME industry can include in their comments. The association will also share details on its plans to maintain lawmakers’ interest and involvement in regard to specific industry concerns.

To learn more, read AAHomecare’s summary of the DMEPOS-related items in the proposed rule at bit.ly/2uHc0Nh.

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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