CMS 'pleased' and 'on track' with Round 2

BALTIMORE - CMS officials are touting the competitive bidding program as a success, thanks to sharply reduced Round 2 payment amounts that have sent shockwaves through the HME industry.

Payment amounts for certain home medical equipment will be, on average, 42% lower than the current fee schedule, compared to 32% lower in Round 1. The product categories with the steepest cuts, on average, are support surfaces (63%), CPAP devices (47%) walkers (46%) and hospital beds (44%).

“We are tremendously pleased with the results that we have seen for Round 2,” said Jonathan Blum, acting principal deputy administrator of CMS and director of the Center for Medicare, during a media call Jan. 30. “We will be paying significantly less in these areas than we do today.”

For the national mail-order program for diabetes testing supplies, the payment amounts are 72% lower on average than the current fee schedule, compared to 56% in Round 1. For example, providers will be reimbursed $10.41 for 50 test strips.

CMS has offered 14,654 contracts to 867 providers as part of the bid program, and 15 contracts to 15 providers as part of the national mail-order program. Of those, 87% are being offered to providers with experience in the market and the product category, and 60% are small businesses.

“This shows us we that can see dramatic savings while also assuring that we continue to have the local presence and the small business presence to give us great confidence that beneficiaries continue to have choice of DME supplier,” said Blum.

Despite the steep cuts, CMS officials said they're moving forward with Round 2 with confidence, standing by their claims that there have been no problems with Round 1.

“We carefully monitor complaints coming in through various channels and we encourage the industry to send in beneficiary complaints so we can respond accordingly,” said Laurence Wilson, director of the Chronic Care Policy Group for CMS, during the call. “We will have the same vigorous monitoring for Round 2.”

And, despite the delayed announcement of the payment amounts, CMS remains “very much on track” to implement the new pricing in 91 cities on July 1, said Blum.