Round 2021: Do You Understand Lead Item Pricing?
CBIC, AAHomecare, industry experts all emphasize the need for providers to start using lead item pricing calculators and educate themselves on the pricing method well before Round 2021 bidding begins.
- By David Kopf
- Apr 25, 2019
As Round 2021 hurtles towards the opening of its June bid window, the Competitive Bidding Implementation Contractor (CBIC), the American Association for Homecare, and various industry experts have exhorted providers to ensure they completely understand the new round’s lead item pricing structure and to familiarize themselves with the online bid calculators available to them.
Lead item pricing is new with Round 2021 and reflects a significant change in how reimbursement within the competitive bidding program is calculated. Under lead item pricing, the single payment amount (SPA) for the lead item in each product category and competitive bidding area (CBA) is based on the maximum or highest amount bid for the item by suppliers in the winning range. Then, the SPAs for all other items in the product category would be based on a percentage of the maximum winning bid for the lead item.
CBIC offers an online calculator at dmecompetitivebid.com/leaditempricingcalculator that lets them enter a bid amount on a lead item to see how reimbursement for the other items in that category would reflect that bid amount.
The recently launched dmecbpeducation.com website, which debuted in late March, also offers a calculator at dmecbpeducation.com/bid-calculator that uses CBIC’s lead item ratios, but add features that include contextual information, such as rates currently in effect. This helps providers see how the lead item bids they enter compare to rates for non-lead items in both dollar amount and by percentage.
This week, CBIC released a statement reminding providers that now is the time for them to start researching their bids amounts under the new system, and how those bids and the reimbursement amounts for the other items in their category will fit their business model.
“Bidders should take into account the costs of furnishing all of the items described by the Healthcare Common Procedure Coding System (HCPCS) codes in each product category when submitting their bid for the lead item,” the CBIC statement read.
At last week’s Medtrade Spring event in Las Vegas, AAHomecare President and CEO Tom Ryan also reminder providers to use the calculators during his organization's April 17 Washington Update session.
“If you don’t understand lead item pricing, you’re going to lose in this program,” he said to attendees of the event. “… If we want to make [Round 2021] sustainable we have to do it right”
Posts from industry members and organizations on social media, reflected those sentiments:
David Kopf is the Publisher and Executive Editor of HME Business and DME Pharmacy magazines. Follow him on Twitter at @postacutenews.