June 22, 2016

by Mindy Yochelson and Nathaniel Weixel

House Bill Would Delay Lower Medicare Rates for Medical Equipment

Cuts to Medicare payments for durable medical equipment in certain parts of the country would be delayed for three months under modified legislation (H.R. 5210) poised to pass the House.

The Patient Access to Durable Medical Equipment Act was set to be passed June 22 by voice vote under a suspension of the rules. However, a sit-in protest by House Democrats over gun control delayed votes during the day.

The legislation would postpone for three months cut to Medicare reimbursement rates that are set to take effect July 1. The DME industry had complained that the cuts were having a negative impact on beneficiaries and suppliers and should be studied for a longer period of time.

The new rates are developed from competitive bids submitted to Medicare by suppliers in 99 regions and applied in areas where there is no competitive bidding.

Senate Passed Bill
The Senate passed a similar version of the bill (S. 2736) late June 21 that would delay implementation of the rate cuts until July 1, 2017.

The year-long delay would allow Congress to “get a better picture of the effects of previous deep reductions that went into effect” on Jan. 1, Tom Ryan, president of the American Association for Homecare, said in a June 22 statement.

The Council for Quality Respiratory Care, a coalition of home oxygen therapy provider and manufacturing companies, in a June 22 statement praised the Senate for “recognizing the urgency in passing this legislation before July 1” and urged the House to do likewise

“By extending the phase in of these cuts, the policy-making and provider communities can more full assess how reimbursement reductions impact both patient access and quality of services,” Dan Starck, chairman of CQRC, said. “We continue to have significant concerns with the established competitive bid rates and their application to patients nationwide.”

Other Provisions
S. 2736, which passed by unanimous consent, also would:

  • establish ceilings for future bidding rounds at the levels established at the bid rates in effect on July 1, ensuring the ceiling doesn't drop below those rates;

  • require publication of a quarterly report by the CMS to monitor the impact of the cuts on Medicare beneficiary access beginning on Oct. 1;

  • require the CMS to take into account specific factors when adjusting the noncompetitive bid rates to ensure that the rates take into account unique aspects of providing services in rural and other nonurban areas; and

  • change the start date of the federal portion of Medicaid reimbursement mirroring Medicare rates by three months from Jan. 1, 2019, to Oct. 1, 2018.

House Bill
The House bill would postpone the lower rates until Oct. 1 and would require the CMS to study the impact of payment adjustments on DME suppliers that went out of business during the first nine months of 2016 when the lower rates were being transitioned.

The House is expected to leave for Fourth of July recess on June 24, while the Senate is expected to recess around June 30.

If the Senate and House don't come to agreement on the details before the House leaves, the Senate could consider the House version the week of June 27.

“The Congress must act now to ensure this bill is signed into law,” Starck said.

Transition of New Rates
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 a blend of 50 percent unadjusted amounts and 50 percent bid-adjusted amounts.

The Medicare agency has stated that applying the lower rates based on bidding in other areas has not harmed beneficiaries. Specifically, the CMS monitored the first four months—from January to April—and saw no change in health outcomes.

The agency also said it saw no change in the rate of assignment for the first four months in 2016 compared with the first four months in 2015. Suppliers in nonbidding areas continued to accept the Medicare fee schedule amount as payment in full, the agency said.

Industry Objection
However, the industry has said that four months was too short a time to make a determination of success.

Ryan of AAHomecare also questioned assumptions based on data from the first quarter of 2016 when there could have been a mix of 2015 claims—based on the higher rate—with the 2016 lower rates.

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

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

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