CMS suggests rewrites for bid program

WASHINGTON - A recently published proposed rule contains several tweaks to the competitive bidding program, a positive development for the HME industry, stakeholders say.

Among the changes: CMS wants to move the bid ceiling to the 2015 fee schedule amounts.

“CMS has realized that, where they are right now, the bidding program is not all its cracked up to be,” said Cara Bachenheimer, senior vice president of government relations for Invacare. “There's access and all these other issues, so they are retroactively trying to tweak it.”

Currently, CMS resets the bid ceiling to each round of new bid rates, continually driving the rates lower and lower, say stakeholders.

“Eventually, providers would be paying CMS to take care of Medicare beneficiaries,” said Bachenheimer. “CMS actually acknowledges that they need to make sure the bidding program is financially stable on a long-term basis.”

The proposed rule also seeks to require surety bonds specifically for the bid program as mandated by the “doc fix” bill signed into law in April 2015. Bidders would have to (a) obtain a $100,000 bond for each competitive bidding area they bid in, and (b) forfeit the bond if they decline to accept a contract and their composite bid is at or below the offer.

The goal, say stakeholders, is to prevent speculative bidding.

“We want people to bid in areas where they are actually going to service patients,” said Kim Brummett, vice president of regulatory affairs for AAHomecare. “(We've seen) bidders who were not present in the marketplace, or with no history in those product categories and just submitted low-ball bids so they could get contracts to sell them.”

Another tweak in the proposed rule, which stakeholders call “interesting,” would introduce an alternative pricing methodology to address “price inversions.” This occurred in previous rounds when an item with a higher utilization got more “weight” than an item with lower utilization but more functionality.

Under the proposed rule, the supplier would submit one bid for a combination of HCPCS codes for similar items with different features. The single payment amount would be based on the median bid for the lead item.

The methodology is modeled after a concept in the market-pricing program championed by industry ally Rep. Tom Price, R-Ga.

“It's very interesting and it's a rational way to do it,” she said, “although there are many specifics that are not yet clear.”