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Directs the Secretary of HHS to expand Round 2 of the DMEPOS Competitive Bidding program to include 91 MSAs (up from 70) – i.e., via the inclusion of the next 21 largest MSAs by total population.
Requires the Secretary to either extend the competitive bidding program or apply payment adjustments using competitively bid rates to all other parts of the country by 2016.
Prior to January 2013, CMS effectuated the expansion called for under this provision in the CY 2011 Medicare Physician Fee Schedule final rule released in the fall of 2010. Subsequent sub-regulatory guidance, including a November 1, 2012 transmittal, has been issued to further clarify this provision. For the latest information pertaining to the DMEPOS Competitive Bidding Program, including Round 2 announcements and timeline, refer to the CMS contractor’s website.
On January 30, CMS released its projected savings from Round 2 of DMEPOS Competitive Bidding. The Round 2 payment amounts, which take effect July 1, 2013, are projected to, on average, save the Medicare program 45% compared to the current fee schedule prices. A CMS press release is available here.
On April 9, 2013, CMS announced that 799 suppliers were awarded contracts as part of Round 2 of the Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding (CB) Program, which takes effect in 91 MSAs on July 1, 2013. In conjunction with the announcement, CMS indicated that 18 suppliers accepted contracts under Round 2 of the program to provide mail-order diabetic testing supplies. A CMS fact sheet is available here. A list of contract suppliers is available here.
On June 19, AAHomecare filed suit in the DC District Court against HHS, citing “serious licensing irregularities” and calling for a halt of the July 1 expansion of the program.
In a related event, on August 2, 2013, CMS issued guidance to state Medicaid agencies regarding coordination of the Medicare DME Competitive Bidding Program with the benefits available to dual-eligibles.
On a related note, on September 9, 2013, HHS’s OIG released a new report – based on a Fort Worth/Dallas, Texas-based analysis – finding that Medicaid FFS pays above Medicare CB Program levels for 30 of 32 examined items of DMEPOS. The OIG says the findings provide a “tangible example of potential State and Federal savings for Medicaid programs if the programs were to use the Medicare Competitive Bidding Program payment amounts for DMEPOS items” – in this case, $2M of $12M spent by the state Medicaid program on such items in the Dallas/Fort Worth area in federal FY 2011 – and points to a FY 2014 President’s Budget proposal under which federal payments for certain Medicaid DMEPOS expenditures would not exceed “what Medicare would have paid.”
On February 24, 2014, CMS issued an advanced notice of proposed rulemaking (APRN) that seeks public feedback on potential adjustments to the Medicare DMEPOS fee schedule for certain items and services in non-competitive bidding areas (CBAs) on the basis of DMEPOS Competitive Bidding payment information. In addition to soliciting comments on a number of explicit questions toward this end, CMS also proposes certain payment methodological changes under the Competitive Bidding program for certain DME and enteral nutrition. Comments are due by March 28, 2014.
On April 8, 2014, the HHS OIG issued a report in which it concluded that, in general, the CMS met Federal requirements – relative to the selection of DME suppliers and the computation of the single payment amounts – under the DME CB Round 1 Rebid Program. Separately on April 8, the GAO made publicly available a report regarding overall experience on Medicare beneficiaries as well as DME suppliers during the second year of the Round 1 Rebid program (2012). A House Ways & Means Committee release from Committee members Jim McDermott (D-WA) and Chairman Kevin Brady (R-TX) on the GAO report is available here.
On May 22, 2014, CMS issued a proposed rule establishing a prior authorization process for certain Medicare DMEPOS items that are frequently subject to “unnecessary utilization” – i.e., those items that “do not comply with one or more of Medicare’s coverage, coding and payment rules.” Under the rule, CMS proposes to “inform the public of the Required Prior Authorization List in the Federal Register with 60-day notice before implementation.” A CMS press release is available here. Comments on the proposed rule are due by 5pm ET on July 28, 2014.
On June 17, 2014, CMS convened in a special ODF call to discuss Medicare prior authorization initiatives; details here. On June 23, the OIG issued a report (highlights) on the Medicare market shares of mail order diabetes test strips, examining the period (April-June 2013) immediately prior to the implementation of the National Mail Order Program on July 1, 2013. Recall that the prior June 2014 OIG report looked at July-September 2013.
On July 2, CMS released its CY15 ESRD PPS proposed rule which, following an advance notice of proposed rule-making on the topic, also embeds separate proposals on implementing the ACA-mandated adjustments to DME to reflect competitively bid rates. CMS estimates that overall, ESRD facilities will experience a 0.3% increase in 2015 for an increase of about $30M in Medicare payments, which derive from updates to the outlier threshold amounts. CMS notes for CY15, under the proposal, hospital-based ESRD facilities have an estimated 0.5% increase in payments coed with freestanding facilities seeing an estimated 0.3% increase. CMS also “projects that urban ESRD facilities will receive an estimated increase in payments of 0.4% while rural facilities will receive a decrease of 0.5%.” Also, the proposed rule also contains proposals on establishing a methodology for adjusting DMEPOS payment amounts using information from the Medicare DMEPOS Competitive Bidding Program and adopting a phase-in of “special payment rules” for certain DME and enteral nutrition in certain areas. These key ACA provisions are addressed in the proposed rule. An agency fact sheet on the proposed rule, including the DME components, is available here. Comments on the proposed rule are due by September 2, 2014.
Key developments in July included:
On a related note, in August, CMS posted updated information pertaining to the expansion of the Medicare prior authorization of certain power mobility devices demonstration.
On Aug. 15, CMS issued guidance delineating systems corrections to address claims processing scenarios involving wheelchair accessories that may be competitively bid through the original Round 1 or a Round 2 process, in some cases for wheelchair base units that were not subject to CB.
On Sept. 24, CMS’ CB implementation contractor (CBIC) delineated zip code changes for Round 2, aligning with USPS changes for certain participating areas. See also a MLN Matters revised article incorporating the procedural CB update.
On Dec. 8, GAO released a report (highlights) on the ongoing implementation of the Medicare competitive bidding (CB) program.
On Dec. 11, CMS announced the bidding timeline for the Round 2 Recompete and National Diabetic Testing Supply Mail Order Recompete of the Medicare Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) CB Program. The agency is statutorily required to recompete CB contracts at least once every three years.
On Apr. 23, 2015 CMS announced plans to recompete the supplier contracts awarded in Round 1 Recompete of the Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program. CMS is required by law to recompete contracts under the DMEPOS Competitive Bidding Program at least once every three years. The Round 1 Recompete contract period for all product categories expires on December 31, 2016
On Apr. 30, CMS released a fact sheet titled “The Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program Repairs and Replacements.”
On May 8, CMS released a transmittal providing a quarterly update to the Durable Medical Equipment, Prosthetics, Orthotics and Supplies Competitive Bidding Program.
2016
On Jan. 1, CMS released an article detailing the quarterly update for the DMEPOS Competitive Bidding Program suppliers.
On May 18, CMS Deputy Administrator Sean Cavanaugh in a blog post noted the cost-saving success of the DMEPOS competitive bidding program and highlighted datathat suggests that fee schedule rates continue to be “more than adequate” to cover the costs of furnishing the DMEPOS items in all areas.
On June 24, CMS announced the release of the July 2016 DMEPOS fee schedule amounts. The DMEPOS and schedule amounts for certain items that were adjusted based on information from the DMEPOS Competitive Bidding Program.
On June 24, CMS released the calendar year 2017 proposed rule for the end-stage renal disease (ESRD) prospective payment system (PPS), which updates rates for renal dialysis services provided to Medicare beneficiaries on or after Jan. 1, 2017. CMS anticipates that aggregate ESRD PPS payments to dialysis facilities will increase by about $50 million in CY 2017, with $30 million stemming from the payment rate update and $20 million from updates to the outlier threshold amounts. This translates to an estimated +5 percent net rate update to ESRD facilities in CY 2017 compared with CY 2016. Comments are due by Aug. 23, 2016.
On Aug. 17, CMS provided instructions detailing changes to the DMEPOS Competitive Bidding Program (CBP) regarding the clarification of the RB modifier for Medicare payment for the repair of parts furnished in Competitive Bidding Areas (CBAs) and clarification of grandfathering instructions for rentals of accessories and supplies.
November: On Nov. 1, CMS announced the contract suppliers for “Round 1 2017” of Medicare’s Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program. The contracts are effective from January 1, 2017 through December 31, 2018. CMS stated that for Round 1 2017, it executed 182 DMEPOS competitive bidding program contracts, which represented 92 percent of contracts offered.
2017
On Jan. 31, 2017, CMS announced plans to consolidate all areas included in the Medicare Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Competitive Bidding Program (CBP) into a single round termed “Round 2019.” Round 2019 was to include 141 competitive bidding areas and have a total of 11 product categories.
On Feb. 7, CMS announced that it is “temporarily delaying” the next steps outlined on Jan. 31 regarding the DMEPOS CBP known as Round 19 to allow the Trump Administration “further opportunity to review the program.” CMS removed all information that was released on Jan. 31 from its website.
SEC. 6410. ADJUSTMENTS TO THE MEDICARE DURABLE MEDICAL EQUIPMENT, PROSTHETICS, ORTHOTICS, AND SUPPLIES COMPETITIVE ACQUISITION PROGRAM. (a) EXPANSION OF ROUND 2 OF THE DME COMPETITIVE BIDDING PROGRAM.—Section 1847(a)(1) of the Social Security Act (42 U.S.C. 1395w–3(a)(1)) is amended— (1) in subparagraph (B)(i)(II), by striking ‘‘70’’ and inserting ‘‘91’’; and (2) in subparagraph (D)(ii)— (A) in subclause (I), by striking ‘‘and’’ at the end; (B) by redesignating subclause (II) as subclause (III); and (C) by inserting after subclause (I) the following new subclause: ‘‘(II) the Secretary shall include the next 21 largest metropolitan statistical areas by total population (after those selected under subclause (I)) for such round; and’’. (b) REQUIREMENT TO EITHER COMPETITIVELY BID AREAS OR USE COMPETITIVE BID PRICES BY 2016.—Section 1834(a)(1)(F) of the Social Security Act (42 U.S.C. 1395m(a)(1)(F)) is amended— (1) in clause (i), by striking ‘‘and’’ at the end; (2) in clause (ii)— (A) by inserting ‘‘(and, in the case of covered items furnished on or after January 1, 2016, subject to clause (iii), shall)’’ after ‘‘may’’; and (B) by striking the period at the end and inserting ‘‘; and’’; and (3) by adding at the end the following new clause: ‘‘(iii) in the case of covered items furnished on or after January 1, 2016, the Secretary shall continue to make such adjustments described in clause (ii) as, under such competitive acquisition programs, additional covered items are phased in or information is updated as contracts under section 1847 are recompeted in accordance with section 1847(b)(3)(B).’’.
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