Moving the HME Industry Forward

Legislative/Advocacy

Competitive Bidding Rural Relief Legislation is Here, and Not a Moment Too Soon

November 23, 2015

WASHINGTON, DC – The campaign to lessen the impact of CMS’ plan to expand competitive bidding-derived pricing to areas outside bidding areas got a major boost with last week’s introduction of S. 2312, legislation that recognizes the unique challenges and extra expense associated with serving patients in less-densely populated areas nationwide. And, given the brief window of time left for Congressional action this year, HME suppliers, manufacturers, and other stakeholders need to be ready to rally support for this bill.

The new legislation, spearheaded by Sens John Thune (R-SD) and Heidi Heitkamp (D-ND), will require CMS to make positive adjustments to competitive bidding derived pricing slated to go into effect on Jan 1, 2016, for companies outside of competitive bidding regions.

The offsets will increase bidding-derived rates by 30% for suppliers in areas that CMS deems “rural,” while providing a 20% boost to rates for other suppliers in non-bid areas. These adjustments are especially needed, given the 45% average cuts the bidding program would apply to these suppliers who never even got a chance to bid themselves.

Under this proposal, lowered rates will phase in from 2016 through 2018, and CMS will be required to revisit pricing adjustments for non-bid areas that takes into account travel distance, clearing price, and other associated costs furnishing this equipment for prices that will be in effect on Jan 1, 2019.

One important component of the legislation that will impact the entire bidding program is the requirement that CMS set the ceiling for future bidding rounds at the unadjusted fee schedule rates in effect on Jan 1, 2015, instead of CMS’ proposal to set a bid ceiling at the previous bid amount rates.

Finally, effective Jan 1, 2020, new Medicaid allowable caps will be applied to the Federal portion of reimbursement that mirror the Medicare rates.

We expect a very similar House bill, championed by Rep Tom Price (R-Ga), to be dropped right after the Thanksgiving break. We anticipate that budget legislation, which needs to be passed by Dec 11, will be the best legislative vehicle to get these changes into effect this year, so time is of the essence. I ask that every HME provider and manufacturer contact their Senators and Representative, by phone, to ask for support. 

Ask your Senators for co-sponsorship of S. 2132, the DME Access and Stabilization Act. Ask your House member for support of forthcoming legislation from Rep Price that will provide relief for HME providers under the bidding program.

You can find additional resources on this legislation at aahomecare.org, and you can quickly send a letter to Congress on the issue at PowerOfHomecare.com.  Please also encourage your peers, colleagues, friends and family to take action today. Together, we can bring home another win for HME suppliers and the patients we serve.

Tom Ryan is president and CEO of the American Association for Homecare, Washington, DC.