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Competitive Bidding Rural Relief

Rural Relief from the Competitive Bidding Program

Take Action!

Join rural relief efforts by visiting the Action Center to send a message to elected officials requesting co-sponsorship of HR 4229, Protecting HOME Access Act. 

Background

In 2003, the Medicare Modernization Act authorized the Centers for Medicare & Medicaid Services (CMS) to develop a program for home medical equipment (HME) to find market-based prices to replace the current fee-for-service prices.  CMS implemented the DMEPOS Competitive Bidding Program in 2008, which was halted a mere two weeks later by Congress due to program design and execution problems.  With a few cosmetic changes to the auction program, CMS began rolling it out once more in 9 metro areas in 2011 and added 91 additional areas in 2013.  

On October 31, 2014, CMS released the final rule on “Medicare Program: End-Stage Renal Disease Prospective Payment System, Quality Incentive Program, and Durable Medical Equipment, Prosthetics, Orthotics, and Supplies,” which established the methodology for making national price adjustments to the fee-for-service payments of specified HME, enteral nutrition, and related services paid under fee schedules.  

On January 1, 2016, CMS began the first phase of a two-part reimbursement adjustment that applied pricing derived from bidding programs in these highly populated CBAs to all areas of the country without exception for rural America.  Bid areas like Atlanta and Los Angeles now set prices for rural and non-urban areas in spite of non-bid areas not having the opportunity to submit pricing to account for unique costs of accessing and caring for beneficiaries in these areas.  

On July 1, 2016, the prices were fully phased in, slashing Medicare reimbursement by over 50% on average.  With the expansion of Competitive Bidding to include non-bid areas, this flawed program now affects every Medicare beneficiary across the nation who depends on home medical equipment.  Further, pricing derived from the faulty Competitive Bidding program is now impacting other payors like Medicaid and TRICARE whose rates are tied to Medicare.  Additional information on the Medicaid impact can be found here.

Relief Efforts

The American Association for Homecare has worked tirelessly with vested stakeholders and Hill champions to provide relief to non-bid and rural areas through statutory and regulatory avenues. Consumer advocacy groups and the National Federation of Independent Businesses have joined the efforts for non-bid relief, citing the detrimental impact on beneficiaries and businesses alike.

Senate Finance Committee leadership implored the Administration to provide relief via regulatory channels, and in December 2016, Congress intervened out of concern by including provisions in the 21st Century Cures Act that provided six months’ worth of retroactive relief on the second phase of the cuts for suppliers in non-bid areas.  However, on January 1, 2017, the full cuts resumed and remain in effect. 

AAHomecare submitted a letter to Health and Human Services in February 2017, articulating the catastrophic harm occurring under the rapid and drastic rate reduction to suppliers and requesting the use of an Interim Final Rule (IFR) to repeal the full phase-in of the adjusted fee schedules, freeze the 50/50 blended rates that took effect January 1, 2016, and amend the methodology for determining adjusted fee schedules.  Congress weighed in with CMS and HHS in support of releasing the IFR as have consumer and clinical groups. 

In August 2017, CMS sent an IFR titled “Durable Medical Equipment Fee Schedule, Adjustments to Resume the Transitional 50/50 Blended Rates to Provide Relief in Non-Competitive Bidding Areas” to Office of Management and Budget (OMB) for review.  Congress feels strongly about the release of the IFR and included report language for the Consolidated Appropriations Act of 2018 (HR 1625; Public Law 115-141) encouraging CMS to release the IFR. On May 9, 2018, the IFR was released, providing 50/50 blended reimbursement relief for "rural" and "non-contiguous" areas from June-December, 2018.

The HME Industry is pursing statutory relief through HR 4229, Protecting HOME Access Act, which was introduced by Representatives Cathy McMorris Rodgers (R—WA) and Dave Loebsack (D—IA).  This legislation will provide more time for Congress to evaluate the effects of bidding-derived pricing for rural and non-CB areas on patient access by extending the transition period from January 1, 2017 to December 31, 2018 with reimbursement rates equal to rates in effect on January 1, 2016.  In effect, this rolls back the second round of cuts that went into effect on July 1, 2016.

For information getting involved in relief efforts, visit the AAHomecare Action Center

Resources

•    Issue Brief: HR 4229 Protecting HOME Access Act 
•    CMR Congressional Letter for Co-Sponsoring HR 4229 ’17 
•    AAHomecare Letter to HHS Secretary Price for Rural Relief ’17
•    House Letter to Leadership Omnibus Rural Relief ’18 
•    Sen Blunt Letter to OMB for Regulatory Relief ’18
•    House Letter to HHS & CMS for Regulatory Relief ’17 
•    Sen Hatch & Wyden Letter to HHS for Rural Relief ’16 
•    ITEM Coalition Letter of Regulatory Relief House ’17 
•    ITEM Coalition Letter of Regulatory Relief Senate ’17 
•    ITEM Coalition Letter of CB Relief Support ’16
•    AARC Letter of Regulatory Relief ’17
•    AARC Letter of CB Relief Support ’16
•    COPD Foundation Letter of CB Relief Support Senate ’16
•    COPD Foundation Letter of CB Relief Support House ’16
•    NIFB Letter of CB Relief Support Senate ’16
•    NFIB Letter of CB Relief Support House ’16 
•    Industry Stakeholder Letter of CB Relief Support ’16
•    ESRD Final Rule/Competitive Bidding Expansion ’14 

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