by Seth Johnson
December 17, 2015

As Congress begins to wrap up the legislative session for the year, our industry priorities are well positioned for advancement. While at press time we do not know what the final outcome will be, based on regular communications with our legislative champions we have done what they asked in order to put our priorities in the best possible position to move on a must-pass bill in early December.

Efforts to apply congressional pressure on Medicare to make changes on their own have been significant from both the House and Senate. However, Medicare shows no signs of changing course unless Congress passes legislation requiring them to do so. So, absent congressional action on industry legislation, Medicare payments to providers will be cut significantly for complex rehab technology (CRT) wheelchair accessories and the DME items included in competitive bidding.

What are the latest developments on the complex rehab and DME competitive bid pricing relief proposals? What can be done to further strengthen and support the proposals? And, what happens if Congress fails to provide relief this year?

Application of Bid Rates to Complex Rehab Items

As has been widely reported this year, Medicare plans to begin applying competitive bid (CB) pricing information obtained through bids on 171 standard wheelchair accessories to reduce payments on CRT wheelchair accessories. These items include complex head support systems, seat/back cushions, tilt/recline systems and specialty controls, to name a few. Such application of bid pricing violates the statutory language in the Medicare Improvements for Patients and Providers Act (MIPPA) of 2008, which specifically exempted wheelchair accessories from CB when used on a complex rehab wheelchair base. For the last six years, Medicare has paid for these items at the traditional fee schedule amount when provided on a complex rehab wheelchair base due to the specific language in the law.

On July 27, Representative Lee Zeldin (R-NY) introduced legislation, HR 3229, to further clarify the non-application of Medicare competitive bidding rates to complex rehabilitative wheelchairs and accessories. The bill, which was introduced at the recommendation of congressional leadership, holds strong bipartisan support from many members on the key committees of jurisdiction. Senator Robert Casey (D-PA) was joined by Senators Portman (R-OH), Schumer (D-NY) and Cochran (R-MS) in introducing the Senate companion bill in October to reiterate the congressional intent of MIPPA and protect these items from the application of bid rates.

In addition, 101 Representatives and 25 Senators expressed their concern with CMS's plan in "Dear Colleague" and other letters to the agency. The strongly bipartisan legislation also has the endorsement of powerful consumer groups including: The ALS Association, Muscular Dystrophy Association, MS Society, Paralyzed Veterans of America and United Spinal Association.

While we are expecting Congress to vote on this must-pass legislation in early December, it is not too late to reach out to your representatives and senators to request their support or to ask them to reiterate their support to committee leaders and the leadership in the House and Senate that this must be addressed this year. If Congress fails to address it, there will be opportunities to address the legislation early next year prior to the full implementation of the reductions, but support to help provide relief for the industry has never been stronger.

Application of Bid Rates in Non-Bid Areas

CMS Final Rule (1614-F) issued November 2014 also outlines how Medicare plans to apply competitive bidding rates in non-competitively bid areas. While providers in these areas will not be required to submit bids, CMS will use single payment amounts from other nearby CBAs to set the rates for these non-bid areas, including areas that Medicare considers to be rural.

The new regional pricing will be phased in beginning January 1. Payment rates for all affected items will be set at 50 percent of the adjusted fee schedule amount versus the current rate. In other words, the rate will move halfway between the current and adjusted rate. For example, if the current fee schedule amount is $100 and the adjusted rate is $75, the payment amount for that item will be $87.50 on January 1. Beginning July 1, 2016, the rates are reduced to 100 percent of the adjusted fee schedule amount or $75 in the example above. In addition, future rounds of bidding would use these adjusted rates as the new bid limit ceilings.

At press time, Representative Tom Price (R-GA) and Senator John Thune (R-SD) were still completing work on a bipartisan proposal to help protect non-bid and rural area providers from the drastic cuts that will otherwise result on January 1. This legislation will provide specific direction to CMS as to how to apply bid rates in these areas.

The near final framework of the legislative proposal would do the following for all DME providers in non- competitive bidding areas:

  • Establish a 30 percent adjustment to address increased costs that suppliers incur in non-competitive bidding areas to be applied to average regional single payment amount (RSPA) as determined by the methodology set forth in 42 C.F.R. 414.210(g) (79 Fed. Reg. 66120 (November 6, 2014)), as well as an update mechanism.
  • Provide for a two-year phase-in of the national price adjustments to the DMEPOS fee schedule set forth in 42 C.F.R. 414.210(g) (79 Fed. Reg. 66120 (November 6, 2014)) when implementing them.
    • 1/1/16 Blended rate of 50 percent of fee schedule and 50 percent of RSPA+30 percent
    • 1/1/17 RSPA+30
  • CMS to implement new payment rule January 1, 2019 to determine future payments amounts.

The latest on the bill and advocacy materials necessary to strengthen support can be found online at aahomecare.org. Just like the CRT accessory legislation, if Congress fails to include this industry priority in legislation this year, there will be a window of opportunity to advance the legislation next year prior to full implementation of the cuts on July 1, 2016.

Bipartisan support is strong for both of these industry priorities. That said, your legislators still need to hear from you regarding the impact these changes will have on your company and the ability to provide quality products and services to Medicare beneficiaries. If we all communicate this message to Congress, I am confident that we will get the relief we need, and that 2016 will be a positive year!