CMS adds teeth to bid program

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Friday, February 3, 2017

WASHINGTON – After several rounds of the competitive bidding program now under its belt, CMS has implemented improvements to Round 2019 that could curb the ongoing race to the bottom, say industry stakeholders.

The biggest improvement, say stakeholders: the bid ceiling has been moved to the 2015 fee schedule amounts. Previously, the bid ceiling had reset to each new round of bid rates.

“Raising the bid ceiling is a huge indication that CMS thinks they’ve hit rock bottom—and gone below rock bottom,” said Cara Bachenheimer, senior vice president of government relations for Invacare. “In order to be financially sustainable, it was necessary to raise the bid ceiling.”

CMS on Jan. 31 announced it would consolidate all rounds of the program into a single competition, with contracts effective Jan. 1, 2019, through Dec. 31, 2021.

Another improvement: Round 2019 marks the first time bidders will be required to obtain a $50,000 surety bond for each CBA in which a bid is submitted. That increases the stakes for bidders, say stakeholders.

“Providers will no longer have the luxury of just declining when the bid prices come out,” said Andrea Stark, a reimbursement consultant with MiraVista. “You will forfeit the bond if you said you could do it for ‘X’ and they offer you a contract for at least ‘X’ and you don’t take it.”

CMS has also added insulin pumps and supplies as a product category in the bid program, but stakeholders question how that will work.

“My experience has been that most pumps are supplied directly from the manufacturers,” said Kim Brummett, senior director of regulatory affairs for AAHomecare. “Will the manufacturers really bid?”

The other product categories are: enteral nutrients, equipment and supplies; general HME and related supplies and accessories; nebulizers, negative pressure wound therapy; respiratory equipment; standard mobility equipment and TENS devices.

Brummett says she is disappointed that oxygen and sleep are still lumped into a singular respiratory category.

“Forcing them together denigrates the bid,” she said.

CMS has added 10 new CBAs—in Alabama, Iowa, Michigan, California and North Carolina—for the CPAP category only. In five of those CBAs, payment for the CPAP device, related accessories, and services will be made on a bundled, non-capped monthly rental basis, while payment in the other five CBAs will be made on a capped monthly rental basis like all other existing CBAs.

“I think CMS is going to be watching to make sure providers in those areas don’t limit the choice to certain brands or models,” says Stark.