Moving the HME Industry Forward

Legislative/Advocacy

Breakdown of CMS New Region and Rural Zip Codes Subject to Bidding Program Pricing

October 12, 2015

WASHINGTON, DC – Last Monday, CMS released the highly anticipated rural zip codes that will get a 10% adjustment to new bidding-derived fees that go into effect nationwide come this January. Following-up on its alert, AAHomecare examined how this will impact the industry and beneficiaries.

According to the USPS, there are nearly 43,000 zip codes in the US. For purposes of the bidding program, they break down as follows:
• Round 1 zip codes – 3,714 (approx. 8.6% of total US zip codes)
• Round 2 zip codes – 13,902 (32.3%)
• Regional zip codes –– 9,099 (20.9%) – subject to new bidding-derived rates (see projected examples below) generated on a regional basis
• Rural zip codes – 16,285 (37.8%) – subject to the above mentioned bidding-derived rates, plus a 10% positive adjustment to these rates.

 

While CMS’ plan to expand the reach of the bidding program remains problematic, the fact that 64% of the areas outside of CBAs that will now be subject to bidding program-derived prices will be classified as “rural” is positive news; this figure is higher than AAHomecare expected.

If you are not in a Round 1 or Round 2 Competitive bid area, you can see if your patients qualify as “rural” by downloading this ZIP file. You can see CMS’ announcement here.

How CMS will Implement Pricing Nationwide
For qualified HME items, the final rule phases in new reimbursement rates for non-CBAs over 6 months beginning January 1, 2016. CMS divided up the continuous 48 states into eight distinct regions.  An unweighted average of all of the Single Price Amounts (SPAs) from the CBAs within each region will be used to determine the Regional Single Price Amount (RSPA) for each affected product.

Claims with dates of service from January 1, 2016 through June 30, 2016 will be based on 50 percent of the un-adjusted fee schedule amount and 50 percent of the RSPA adjusted fee schedule.  Starting on July 1, 2016, reimbursement rate will be 100% of the RSPA adjusted fee schedule amount.  The following are estimated examples of these drastic cuts –  graphic here

The RSPAs are still bound to a national average that cannot vary more than 10% above or below the combined, unweighted average of all RSPAs in the country.  As such, any area with a RSPA that is greater than 110% of the national average will be adjusted downward.  Even the most remote, rural areas like Montana and North Dakota will be bound to the national ceiling even though costs may far exceed that of the high-population CBAs from which the prices were derived. See more background in AAHomecare’s issue brief.

Note: total national zip code figures are approximate from the US Postal Service; Round 1 & 2 zip codes, as well as “rural” zip code figures are derived from CMS/Palmetto info.

Power of Homecare Grassroots Program Continues to Mobilize Industry Against Rollout of Bid Pricing
WASHINGTON, DC – As the nationwide rollout of competitive bidding prices draws closer, AAHomecare is continuing the full court press on this issue. AAHomecare has been working with allies on Capitol Hill to build support for expected legislation that would provide relief for rural providers. However, Congress needs to hear directly from providers on this issue as well.

As AAHomecare storms Capitol Hill, HME providers and employers can contact their representatives in the House and Senate to let them know what drastic price reductions that would come with the expansion of bidding-derived pricing will mean for your business, and for the patients you serve. You can also ask that they be on the lookout for legislation to address the issue soon.

Do Your Part at PowerofHomecare.com
The Power of Homecare grassroots program is designed to unify and leverage the collective power of our industry to influence Congress to stop the nationwide rollout of competitive bidding pricing. PowerofHomecare.com makes it quick and easy to email your elected officials in less than five minutes. Email your Congressperson now!

There has already been an outpouring of support at PowerofHomecare.com, generating 3,800 letters to Congress in two months. With the dire consequences of the nationwide rollout of competitive bidding right around the corner, we need to beat that number.

After you have sent your letter to Congress at PowerofHomecare.com, forward PowerofHomecare.com to everyone you work with and explain that our friends and colleagues’ businesses and livelihoods are on the line—no one is immune from the impacts of these cuts. Ask them to visit the site and send an email to Congress telling them to stop the cuts.

An email or a call to a Congressional office may seem like a drop in the bucket, but as AAHomecare works toward the introduction of new legislation, they need Congressional offices to be hearing from their constituents on this issue. Numbers matter. These calls and emails educate policymakers, apply pressure, and swing key legislators to the industry’s side.