CMS Skips Round 2021 Contracts for 13 Categories

Agency only awards contracts for off-the-shelf back and knees braces, leaving the industry guessing on the exact fate of nearly all remaining categories.

After weeks of wondering what would happen with Round 2021 of competitive bidding, the industry finally has its answer, but it’s not exactly the answer HME stakeholders were expecting.

After originally taking bids for 16 product categories in the 130 competitive bid areas of Round 2021 of its competitive bidding program, CMS has announced that it is awarding contracts for while off-the-shelf (OTS) back and knees braces.

For the remaining 14 categories, we know that CMS removed the non-invasive ventilator category due to the COVID-19 public health emergency. However, CMS also announced that it will not award Round 2021 contracts for any of the other 13 categories it had bid in previous rounds “because the payment amounts did not achieve expected savings.”

For the OTS back and knees braces categories, CMS has released the single payment amounts, which used Round 2021’s lead item pricing methodology. The agency said it made contract offers in 127 CBAs for the two categories and expects to save $600 million over the three-year Round 2021 contract period.

The full announcement from CMS can be read here. An update from CBIC can be read here.

More Questions Than Answers

The prevailing issues that CMS’s statement did not make clear is how reimbursement for the 13 categories CMS opted not to compete will work and will current rates still apply?

The last competitive bidding contracts expired Dec. 31, 2018, and since then, the program has been dormant, with any qualified DMEPOS supplier serving Medicare beneficiaries. While most in the industry expected that gap to exist for a maximum of 24 months, it appears — at least for the moment — that gap presumably has no foreseeable end with CMS’s latest Round 2021 announcement.

While the industry’s legal, reimbursement and government relations experts seek clarity on what happens next after analyzing a 210-page proposed rule that accompanied the Round 2021 announcement, some initial reaction came in:

“HHS and CMS are making the right call here,” noted Tom Ryan, president and CEO of the American Association for Homecare, in a public statement. “Removing the majority of HME product categories from Round 2021 will allow suppliers to effectively serve their communities as the public health emergency continues, and also provide care for individuals with long-term healthcare challenges as they recover from COVID-19.

“Once we’re clear of this pandemic, policymakers, HME stakeholders, clinician organizations, and patient groups should take advantage of the opportunity to develop a new system for Medicare reimbursements,” he added. “It’s time to move on to a better approach that expands access to HME as the patient population that depends on these products and services continues to grow.”


About the Author

David Kopf is the Publisher and Executive Editor of HME Business and DME Pharmacy magazines. Follow him on Twitter at @postacutenews.


Fri, Oct 30, 2020 Lance Palmer

I don't understand why industry leaders are overjoyed at CMS's refusal to award contracts for 13 competitive bid categories. I'm outraged! Is their action even legal? CMS isn't delaying this round due to the pandemic, they are taking their ball and going home because they didn't win this round of the game (the payment amounts did not achieve expected savings)! If suppliers bid under the market clearing price they are legally bound to accept a contract and even forfeit their bid bond if they don't accept. However, now that the shoe is on the other foot and prices would actually INCREASE in the current round, CMS decides they don't want to play the game anymore and cancels the game. Outrageous! This is not only unprincipled, it should be breach of contract. The auction is an offer to buy. Fulfilling the terms and conditions of the offer by qualified sellers is acceptance of that offer and becomes the basis of a contractual agreement between buyer (CMS) and sellers. Let's get Jeffrey Baird to start a class action lawsuit on behalf of all of the bidders. At least the time and expense of going through the whole bidding process should be covered, including the now-meaningless bid bonds that bidders had to purchase! The entire rationale of "competitive pricing" or "market pricing" for Medicare beneficiaries came crashing down when it became clear that CMS would only allow the price to go down and not up. The sole reason many of us participated in this round was that the new rules seemed to encourage reasonable "market" pricing rather than artificially low pricing dragged down by suicide bids. We had a reasonable expectation that pricing would increase to a level that made sense to service Medicare beneficiaries. By abandoning the process when pricing was set to increase to a reasonable level, CMS is leaving Medicare patients and hospital discharge planners in a compromised situation where they are hunting for any supplier who will supply beds and other equipment through Medicare. As an industry we should not be patting CMS on the back for their cowardly action, we should be holding them responsible!

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