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Rural Bidding and Retail Pricing Budget Proposals a Concern for HME Community

As reported in last week’s alert, the Trump Administration published the HHS Fiscal Year 2021 Budget in Brief which included several proposals related to HME. Many of these proposals have been included in previous years’ Presidential Budgets, and a proposal’s inclusion in the Budget does not necessarily indicate the proposal will be implemented in the coming year.  However, there are a few proposals in particular that could have significant impacts on our industry.
The Administration has laid out a timeframe for expanding competitive bidding to additional geographic areas.  Under this proposal, bidders who win a contract will be receiving their own bid amount as their single payment amount.  This would not only mean that suppliers serving rural areas will have to participate in bidding, causing additional administrative burden for the supplier community, but there will also potentially be multiple different SPAs for a single item depending on the supplier, which will add further complexities to the already-complicated program. While this proposal has been included in previous fiscal year budgets going back to 2018, this is the first time that a target date (2024) was included.  Adding a timeframe to the proposal signifies that the Administration has a plan to implement this proposal. AAHomecare has communicated previously to the Administration on the concerns with the expansion of CBP and we have already started a dialogue on the issue with key Congressional offices.
The Budget also includes a new proposal to use retail prices to adjust the fee schedule for items that are not included in the bidding program, which could significantly lower the current Medicare rates for items including: medical supplies, invasive ventilators, orthotics, and CRT items.  Using retail-based pricing does not take into account the additional service, billing, and compliance requirements associated with serving Medicare beneficiaries.  Because this proposal is projected to save Medicare $1.6 billion, the concept will be attractive to be used as a pay-for for another legislative initiative.
This year’s Budget also includes a proposal to create a benefits manager for DME items that have a monthly rentals or require regular refill of supplies. This recommendation has been included in previous budgets.  This is of great concern to the industry because this would essentially add a new layer of red tape between the supplier and beneficiaries, potentially increasing supplier administrative burden and affecting patient access to HME.
AAHomecare will be working with other industry stakeholders to communicate our concerns with these proposals with the Trump Administration and CMS.  We will also be raising these issues with our champions and other leaders on Capitol Hill and will begin educating and mobilizing the HME community to engage Congress on these issues. While these proposals may not have immediate impacts on HME, we need to make sure Congress is aware of the burdens they will cause for suppliers and potential implications for patient access.
Overall, there are a total of 15 proposals AAHomecare has identified that are related to HME industry in some capacity, including proposals related to appeals, prior authorization, and diabetic care. We plan on thoroughly reviewing each proposal and submit an official response to the Administration. You can find the list of the 15 HME related proposals here.