May 27, 2016

Published by Bloomberg BNA

DME Groups Urge Congress to Delay New Payment Rates

Durable medical equipment suppliers are urging top congressional leaders to pass legislation that would postpone lower Medicare reimbursement rates set to take effect July 1.

With the final phase-in of the new rates, “beneficiary access to high quality products may be compromised at the prices set,” the supplier groups said in a May 25 letterto House Speaker Paul Ryan (R-Wis.), House Minority Leader Nancy Pelosi (D-Calif.), Senate Majority Leader Mitch McConnell (R-Ky.) and Senate Minority Leader Harry Reid (D-Nev.).

The new rates are developed from competitive bids submitted to Medicare by suppliers in certain areas and applied in areas where there is no competitive bidding.

In January, the CMS began to install the new rates in noncompetitive bidding areas based on payment information from some of the 99 areas in which there is competitive bidding. To ease the transition, the rates are being phased in. In January, reimbursements were based on blend of 50 percent unadjusted amounts and 50 percent bid-adjusted amounts.

Fully bid-adjusted rates are scheduled to take effect July 1.

National, State Groups

Nine national groups, including the Advanced Medical Technology Association and the National Home Infusion Association, were joined by a couple dozen state DME groups in sending the letter.

The groups want Congress to pass H.R. 5210 and S. 2736) to delay implementation until Oct. 1, 2017, to provide more time for Congress to evaluate the effects of the first rate reduction that took place in January.

Julian Husbands, a senior vice president at Apria Healthcare, a DME company, told Bloomberg BNA May 27 that there's “solid bipartisan support for these bills generally and the policy more specifically, so we remain hopeful that the legislation will pass prior to July 1.”

Half-Year Monitoring

In their letter, the groups said that six months is inadequate to monitor potential disruption in beneficiaries’ access to the DME items, “and to evaluate what impact major reductions in payment have on their access to life-sustaining equipment and services.”

The costs of providing products to Medicare beneficiaries may be very different in the non-bid areas from those in the bidding areas, they said.

For instance, DME suppliers in the non-bidding areas may not have a large volume of Medicare-related business and, therefore, may not be able to afford products at the prices set in a different location by different providers, the groups said.

Independent Analysis

The groups complained there has been little independent analysis of the competitive bidding program to determine such issues as whether the program has influenced physician decisions to prescribe specific products.

The Centers for Medicare && Medicaid Services recently said its data show that DME providers in locations subject to competitive bidding rates continue to accept payments based on Medicare rates that resulted from the bidding process. However, DME groups have disputed that smooth transition.

To learn more, visit and follow CQRC on Twitter at @TheCQRC.

Click here to see the original article on the Bloomberg BNA website.

Learn More About Home Respiratory Therapies:

Millions of Americans are living with COPD and Obstructive Sleep Apnea, experiencing acute respiratory failure, or living with neuromuscular diseases. These individuals rely upon home respiratory therapies to remain at home. Learn more about home respiratory therapies and how they can help.

Stay in Touch:

Subscribe to our newsletter