June 8, 2016

by Mindy Yochelson

Medicare Says DME Bidding Hasn't Hurt Beneficiary Health

Medicare Monitoring DME Bidding Impact

Key Development: New CMS data showed beneficiaries not harmed by competitive bidding.

Next Step: Full implementation of bid rates begins in less than two weeks.

June 8 (BNA) -- Paying durable medical equipment suppliers at lower rates based on competitive bidding isn't causing an uptick in deaths, emergency room visits or otherwise negatively impacting beneficiary health, the CMS said June 7.

The CMS monitored the first four months of a new payment structure and saw no change in health outcomes, Sean Cavanaugh, deputy administrator and director of the Center of Medicare at the agency, said in a blog posting.

The Centers for Medicare & Medicaid Services' monitoring system tracks access to items and services and a number of clinical outcome measures such as mortality, hospitalizations, and emergency room visits.

Bidding Purpose

Competitive bidding is intended to set “more appropriate” payment amounts, in order to reduce beneficiary out-of-pocket expenses and Medicare program expenses. Industry groups have charged that bidding has hurt beneficiary access to DME and has put some neighborhood suppliers out of business.

The latest data, released in spread sheets, compared 2016 to 2015 on such factors as hospital and skilled nursing facility use, as well as death and emergency room rates in non-competitive bidding areas.

Medicare DME payments to suppliers are based on competitive bidding in 99 metropolitan statistical areas.

In January, Medicare began phasing in rates in other MSAs that are based partly on the bidding rates in the 99 areas. Until the end of June, the rates are based half on bidding and half on the DME fee schedule. Starting July 1, the rates will be based just on bidding.

Time Too Short

Tom Ryan, president of the American Association for Homecare, told Bloomberg BNA June 8 that his group is opposed to making outcome assessments based on just four months of data. In addition, a phase-in of rates should be for at least a couple of years to determine impact. A six-month period is “outrageous,” he said.

The trade group's staff is analyzing the data and will have assessments shortly, he said.

The CMS in May released data that showed no change in the rate of suppliers accepting the Medicare fee schedule amount as payment in full, known as accepting assignment. The agency took that as a sign that rates are sufficient.

Supplies, Services Furnished

Cavanaugh's blog said the data also showed that the amount of supplies and services furnished in non-competitive bidding areas has remained steady and that calls received by the Medicare help line related to access to items and services declined in the first quarter of 2016 compared to the number of calls received in the first quarter of 2015.

Ryan said that it's not immediately clear whether the number of claims fell from 2015 to 2016 which could show that beneficiaries are paying out of pocket for their DME.

While full implementation of bid rates in the nonbid areas begins in less than two weeks, the group is continuing to lobby Congress to pass bills (H.R. 5210 and S. 2736) to require a delay.

The Council for Quality Respiratory Care, a coalition of home oxygen therapy provider and manufacturing companies, said in a June 8 statement that further cuts in DME rates could “put access to high-quality and innovative home respiratory therapy at risk,” and result in higher overall Medicare spending due to increased hospital admissions.

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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