Editor's Note

CMS's Round 2021 Surprise

If CMS's decision to punt on 13 categories left you feeling left out in Limbo, it's good news. Sort of.

• By David Kopf
• Dec 01, 2020

Right before Halloween, after weeks of radio silence, CMS finally announced Round 2021 as well as its proposed rule concerning rural providers. The proposed rule had some good news for rural providers (although it still needs some changes), but the Round 2021 announcement was particularly surprising: 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 was only awarding contracts for the off-the-shelf back and knees braces categories.

As for the 13 remaining categories (CMS had already removed the non-invasive ventilator category due to the COVID-19 public health emergency), CMS announced it would not issue contracts. In other words, it decided to punt.

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. That claim requires review, because, as Tom Ryan, president and CEO of the American Association for Homecare, noted in a recent HME Business Podcast interview, there are some wide geographic swings in the pricing for those items.

But let’s get back to those 13 categories. Essentially CMS was pressing pause on the program because, as it stated, it “did not achieve expected savings.” In other words, what CMS was telling DMEPOS stakeholders is that it had reached the floor in terms of reimbursement. That’s both good news and possibly bad news. Maybe we should call it confusing news?

Let’s review: 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 that gap presumably has no foreseeable end with CMS’s latest Round 2021 announcement.

The prevailing question that CMS’s statement elicited was, how will reimbursement for the 13 categories that CMS opted not to compete work and will current rates still apply?

It appears that for the foreseeable future, that is indeed the case: the current rates will apply. DMEPOS providers will continue to provide these 13 categories without contracts. That’s good news as it means that HME providers will continue to help patients just like they’ve been doing under the competitive bidding program’s long-running dormancy. That’s good news not only for providers but for U.S. healthcare in general. We’re in the middle of a pandemic, and the last thing we need is massive upheaval when it comes to front-line medical equipment providers.

But, as I mentioned, CMS will continue reimbursing items in the 13 categories using the previous single payment amounts. That’s not exactly ideal given that those bid amounts were generated literally years ago. A whole lot has changed during COVID-19, and providers' operating structures have become more complex, and in many cases, more expensive.

Moreover, CMS shouldn’t expect that DMEPOS suppliers will be satisfied to work at basement-level prices on an open-ended basis. Moreover, even with Producer or Consumer Price Index adjustments, I still don’t see that arrangement as tenable.

Also, what about price increases? With the lead item pricing in place for the first time with Round 2021, we could have seen an upward shift in single payment amounts for some items. Who knows? All we have is CMS’s statement that it didn’t achieve any savings. Are bid systems only allowed to go down? Since when? How do we know what the actual single payment amounts would have been without CMS releasing the information?

Fortunately, a few days after CMS’s announcement, the American Association for Homecare started pressing CMS on the transparency of the bid amounts. This is a pivotal issue, and I’m sure everyone in the industry is eager to know how the bids came in. In the meantime, let’s take the “W” at least when it comes to the fact that competitive bidding remains on hiatus.

This article originally appeared in the Nov/Dec 2020 issue of HME Business.