CMS’s Final Rule: What’s Next?

AAHomecare says that while the rule might be final ‘we’re just getting started.’ How do providers proceed?

At the beginning of the month, CMS released its final ESRD/DMEPOS rule, and the industry is still coming to terms with its various pros and cons, and how it will set the stage for HME in the next several months.

The Final Rule contains provisions that are clear wins for the industry, such as lead item pricing; the bidding gap; additional rural relief; and a new method for calculating SPAs. The American Association for Homecare recently described it as “the most substantial infusion of Medicare dollars into our industry” since CMS first implementing competitive bidding.

“So why does a $1 billion-plus win for HME nonetheless feel like a bit of a disappointment?” asked AAHomecare President and CEO Tom Ryan in a statement from the association.

He noted some key issues that the Final Rule didn’t address, such as no retroactive CPI adjustment from the beginning of the last bidding rounds, and no relief for non-bid area providers that are not rural, and in the contiguous United States.

“… The failure to address reimbursement rates for other suppliers in the gap before the next round of the bidding program takes place is unacceptable,” Ryan said. “Congress had made it clear that they believe that all non-bid areas should receive the 50/50 blended rate that rural areas are getting — a sentiment expressed in both the CURES bill and in report language in March 2018 Omnibus budget legislation, in addition to well-supported Congressional sign-on letters.”

Moving Forward

On the business front, while providers still have to deal with reimbursement cuts due to bidding, the bidding gap at least gives them an opportunity to serve Medicare beneficiaries without having to win a contract. Ryan noted that they will still have to deal with rates that result in “razor thin” profit margins.

“Every supplier, including current bid winners, will have to make their decisions based on their own economic reality and ability to effectively serve patients at these rates,” he said. “It will be extremely interesting to see how the industry responds to this ‘opportunity.’”

Ryan also says providers need to educate themselves on how the Lead Item bidding methodology the Final Rule stipulated for the next round of competitive bidding. AAHomecare and other HME stakeholder organizations have developed to help providers understand and navigate the Final Rule’s changed to the program.

“We’ll keep you updated as significant new guidance and resources are added to the site before the next round, especially in terms of addressing the Lead Item bidding requirements,” he added.

Advocacy Agenda

On the regulatory and legislative front, Ryan said that a sub-group of AAHomecare’s Regulatory Council has already met to plan how to influence sub-regulatory guidance on the Final Rule, as well as to address CMS’ plans to include ventilators in the bidding program. AAHomecare is also meeting with oxygen and respiratory therapy groups on the ventilator issue as well as plans for addressing oxygen-related provisions in the Final Rule.

“In the days following last week’s election, we were also on Capitol Hill to meet with key committee staff to discuss any opportunities for legislative action in the upcoming ‘lame duck’ session, as well as laying the foundation to build on recent progress we’ve made in the House and Senate when the 116th Congress convenes in January,” he added.

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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