Proposed Presidential FY 2021 Budget May Expand Competitive Bidding

WASHINGTON, D.C. (February 12, 2020)—This week, the President’s Fiscal Year 2021 Budget was published by the Trump Administration. The Department of Health and Human Services (HHS) published an accompanying Budget in Brief that highlights all the proposals that impact health care. The American Association for Homecare (AAHomecare) is currently in the process of reviewing the proposals, but has currently identified 15 proposals that will directly impact the DME industry. Many of the proposals were included in the previous year’s presidential budget.

Proposals that could have significant impacts on DME include:

Proposal 1: Reform and Expand DME Competitive Bidding
The president is proposing that beginning in 2024, the single payment amounts will be based on individual winning bidder’s bid amount (rather than the maximum winning bid methodology employed in Round 2021) and expands competitive bidding to other geographic areas, including rural areas. Although this proposal has been included in the previous year’s budget, this is the first time the president is stating a timeframe.

Proposal 2: Use Retail Price Information for DME Fee Schedule Rates
For this proposal, the president is proposing to use available retail prices to create the DME fee schedules. This will negatively impact the DME prices, and using this methodology will not take into account the associated services that Medicare DME suppliers offer. 

More detail is available in HHS’s 2021 Budget in Brief; the above-referenced proposals can be found on pages 83-84. The Administration releases a fiscal budget annually, and it does not mean that the proposals will come to fruition this year. AAHomecare will be reviewing the individual proposals thoroughly and will share additional perspectives soon.