CMS Publishes New Final Rule for Competitve Bidding

WASHINGTON, D.C. (October 31, 2016)—CMS issued a final rule last week, covering end-stage renal care and changes to the DME competitive bidding program. Provisions of interest to the home medical equipment community include:

Bid Ceilings—Bid ceilings for future rounds will be based on the 2015 fee unadjusted fee schedule, instead of CMS’s earlier proposal to establish bid ceilings at the current CBA pricing.

Surety Bonds—Bidders will be required to obtain a $50,000 bid surety bond from an authorized surety for each CBA associated with their bid. The rule also sets forfeiture conditions for the bid surety bonds if a bidder does not enter a contract when their composite bid is at or below the offered amount.

Breach of Contract Appeals—The rule extends the appeals process to all breach of contract actions that CMS may take under the bidding program, rather than just for contract termination actions.

Lead Item—The final rule sets forth a provision for lead item bidding for certain product categories in future rounds. This will prevent the creation of price inversions which has occurred in round 2 CB.

The surety bond provisions stem from the successful efforts of AAHomecare and other HME stakeholders to include surety bond requirements in comprehensive Medicare-related legislation (H.R.2) which was passed and signed into law in April 2015. The new rule also aligns CMS regulations with language in that bill requiring that bidders meet state licensure requirements where applicable.

“We’re happy that CMS has decided to use a common-sense approach with regards to bid ceilings for future bidding rounds,” said Tom Ryan, president and CEO for the American Association for Homecare (AAHomecare). “It’s also good to see that CMS is moving forward with surety bond requirements this industry has advocated for; this is an important step in keeping non-serious and unqualified bidders out of future rounds.”

“However, the bidding program still needs significant fixes on a variety of fronts,” Ryan added. “AAHomecare will continue to push for legislation that would roll back part of the deep reimbursement cuts for non-bid areas in the post-election lame duck Congressional session.”

“We are pleased that CMS changed the original provision of a $100k bid bond to a $50k bid bond,” said Kim Brummett, vice president of regulatory affairs for AAHomecare. “The Association recommended this change to CMS based on input from our members and other industry stakeholders.”

The CMS rule is set for publication in the Federal Register on November 4. A pre-publication version of the rule can be seen here. More information is also available in CMS’s fact sheet on the rule.

Visit aahomecare.org for more information.