Industry Leaders Offer Praise to CMS for Extended Bidding Window

Washington, D.C. (May 17, 2019)—A group of industry trade organizations is commending the Centers for Medicare & Medicaid Services (CMS) for releasing detailed guidance describing how bidders’ estimated capacity will drive the final single payment amounts (SPAs) and for announcing a new bidding window for Medicare’s Round 2021 of the Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) competitive bidding program (CBP). The 60-day bidding window—which will now open on July 16—gives potential bidders and suppliers additional time to understand how the major changes coming to Round 2021 of the competitive bidding program will affect them.

“We commend CMS for ensuring stakeholders have additional time to familiarize themselves with the new competitive bidding program reforms and how they will impact their business,” said Robert Rankin, executive director of the Healthcare Nutrition Council. “It is important that every stakeholder be prepared to bid responsibly in Round 2021, which is why industry experts have come together to launch a nation-wide education campaign, complete with free information, webinars and easy-to-understand tools and calculators so providers can get up to speed quickly.”

To help potential bidders navigate the new competitive bidding program, a collaboration of five industry leaders launched a website offering useful information and easy-to-understand tools, including interactive bid calculators for each of the 16 product categories available for bidding.

These tools are intended to help suppliers and prospective bidders understand the new lead item pricing methodology, and how a bid for the lead item impacts the rest of the items in the product category and how those SPAs would compare to current 2019 Medicare rates. These new SPAs will also essentially become the rates in non-CBAs not defined as rural, while CMS will add only 10% to the SPAs to set the rates in the non-CBAs designated as rural once the blended rate sunsets December 31, 2021.

“It’s critically important that suppliers realize the broad impact that the rates set though Round 2021 will have on almost every HME payer, both public and private,” states Tom Ryan, president and CEO of the American Association for Homecare. “The results of Round 2021 will impact rates for rural and other non-bid suppliers under Medicare, as well as for Medicaid, TRICARE, MCOs, and other payers who use Medicare rates as a guide in setting their own fee schedules.”

CMS also recently released the final critical piece of the methodology used to establish the SPA. The new guidance explains that CMS will used bidders estimated capacity (their historic capacity plus their projected increase in the number of patients they say they can serve) along with the bid amount to rank bidders in the array.

“Prospective bidders also need a clear understanding of how the new lead pricing bidding methodology works,” added Ryan. “In their 2018 Final Rule, CMS noted that suppliers ‘may have to bid an amount that is higher than the amount they would bid if they were bidding for the lead item alone in order to factor in the cost of furnishing all of the other items in the product category.’ Suppliers need to do their homework and fully utilize the bidding calculators at dmecbpeducation.com to make sure they are ready to bid smart.”

“The newly released capacity policy also shows how influential a bidder’s capacity is to setting the rate,” said Mark Higley, Vice President of Regulatory Affairs of VGM Group, Inc. “While CMS does not guarantee volume, bidders who overestimate their capacity could lead the SPA to be artificially low.”

CMS will evaluate bidders’ estimated capacity to try to avoid over-estimation, but it is critically important that bidders understand the pivotal role that capacity plays in setting the rates.

In addition to the website, the collaboration will be holding in-person and online workshops to help potential bidders prepare for Round 2021. On May 20, the collaboration will host a one-hour Bid Smart 2019 webinar to educate DME suppliers about the upcoming major changes to the competitive bidding program. The group will also host an in-depth one-day Bid Smart 2019 Summit in Nashville on June 5.

To view the website and bid calculator, visit dmecbpeducation.com.

While the website provides useful tools to educate prospective bidders, it is not intended, nor should it be construed to be legal advice. Bidders are responsible for their bids and should consult their own counsel for legal advice or the CBIC.