The new competitive bidding category could create patient access problems
by Kristin Easterling
June 3, 2019

In the last round of competitive bidding, Barnes Healthcare Services, a 100-year-old family-owned business headquartered in rural Valdosta, Georgia, won bids for oxygen and enteral nutrition. CEO Charles Barnes IV said he’ll be bidding again in the new round of competitive bidding that begins soon—but the outcome is uncertain.

His company, which provides infusion pharmacy and retail pharmacy services in nine locations across Georgia and Florida, is heavily involved in respiratory. Barnes Healthcare Services has a home medical equipment (HME) line that includes noninvasive ventilators (NIVs), CPAP, tanks, portable oxygen concentrators and the AffloVest for airway clearance. The company has 260 full- and part-time employees and some of the locations have more respiratory therapists than delivery drivers.

Yet Barnes is concerned that the companies that win bids won’t be regular providers of NIVs, creating an access issue.

“[The Centers for Medicare & Medicaid Services (CMS)] could be taking away patient access to providers with the clinical knowledge and history of providing ventilation,” said Barnes, whose company has been providing ventilation services since the mid-1990s. “The people who win the bid may have never served a ventilator patient.”

Many providers and advocates have expressed the same fear as preparations build for Round 2021 of the competitive bidding program (CBP).

CMS’s Timeline

Complaints began in fall 2018, when CMS published a request for public comments on including certain classes on noninvasive home ventilators (HCPCS codes E0465, E0466, and E0467) in Round 2021 of the CBP. The request also sought comments for adding several classes of knee and back braces to the program.

Providers sprang into action to tell CMS that adding ventilators to the program would create access issues for the patients they serve.

“Ventilators are life support systems for the individuals who use them,” said Tom Vorhees, CEO of PromptCare, a respiratory and infusion therapy provider serving adult and pediatric ventilator patients throughout the Mid-Atlantic and Northeast regions. “If CMS’s decision to include ventilators in competitive bidding results in a lack of access to these critically important products, the impacts on beneficiaries and their caregivers will be devastating.”

Nonetheless, CMS released an FAQ document in March 2019 confirming that ventilators would be included in Round 2021 of the CPB.

Industry Concerns

Much of the concern stems from ventilators’ demands on maintenance and clinical support. Medicare currently classifies NIVs in a category of items that require “frequent and substantial servicing,” recognizing the intensive and continual service these items require “in order to avoid risk to the patient’s health.” The American Association for Homecare (AAHomecare) noted that no other categories of medical equipment requiring intensive service were considered for Round 2021 of the CBP.

“Ventilators are very different from the other items on CBP as it’s a service as well as a product,” said Elliot Campbell, senior vice president of Trace Medical, a provider of rental ventilators and inventory tracking.

“Ventilator patients need clinical support when they start using the equipment and throughout their lives,” said Greg Apostolou, Trace Medical’s senior vice president and CFO.

“Adding NIVs to (competitive bidding) will force providers to re-evaluate their clinical obligations to ensure profitability for their organization, which will have a negative impact on this very vulnerable patient population,” Apostolou said.

Also at issue in this round of competitive bidding is a new bid structure, including lead item pricing, in which providers will only bid on a single item in a category of related items. CMS will use the price of the lead item to calculate payment amounts for the remaining items in the category. Many providers are expressing confusion about the process.

The DMEPOS Competitive Bidding Implementation Contractor (CBIC) created a lead item calculator to help providers better understand. According to an annotated version designed by AAHomecare, the Council for Quality Respiratory Care (CQRC), The VGM Group and the Healthcare Nutrition Council, the Round 2021 projected bid ceiling for non-invasive ventilators is $934. (Try out the calculator and category spreadsheets at dmecbpeducation.com.)

Prior History

In previous rounds of competitive bidding, suppliers faced problems caused by unsustainable prices and costs associated with the program, particularly in rural, non-bid areas. The industry saw a 37% decrease in unique suppliers between November 2010, when the program began, and January 2019.

“Subjecting highly specialized, service-intensive products to a reimbursement methodology designed to find the lowest-cost suppliers will limit access and further narrow an already low number of companies who provide NIVs,” said Jay Witter, AAHomecare’s senior vice president of public policy.

Witter added that the lack of a Local Coverage Determination also puts suppliers at risk when providing NIV; they won’t be likely to accept referrals when they’re not comfortable that a patient meets coverage criteria.

“Additionally, this is the first item that is considered frequently and substantially serviced where all supplies are included in the rental,” he said. “Suppliers must be diligent to ensure these costs are included when considering bidding.”

How Bidders Are Reacting

Barnes, the Georgia-based HME provider, said NIV patients require a great time commitment. This time around, his company will bid in its region for four categories: CPAP, enteral, ventilators and oxygen.

“We have a team of respiratory therapists who work with our referral sources,” he said. “They help transfer the patients home and educate them on ventilation. They call the patients regularly, and are highly engaged with patients.”

Barnes noted that other payers follow Medicare pricing, and more seniors are moving onto Medicare Advantage plans. “It’s a smaller market. We have to capture that market.”

“Only 10 to 15 providers accept bids,” Barnes said, “but everyone has to live with those prices.”

Advocacy Efforts

AAHomecare has participated in several meetings with CMS to combat the inclusion of NIV in the next round of competitive bidding. At press time, HME advocates were on Capitol Hill working for reforms to the CBP. Reps. Morgan Griffith (R-Va.) and Peter Welch (D-Vt.) have released a Congressional sign-on letter asking CMS to reverse course on the decision to add NIVs to Round 2021. No legislation has been introduced to keep NIVs from the program.

“We are working in concert with respiratory stakeholders, as well as respiratory clinician groups and patient groups who depend on ventilators to make sure Congress is aware of the plan to include NIVs in the bidding program, and the potential impacts on both suppliers and patients,” Witter said.

CMS is scheduled to open registration for Round 2021 on June 10. The bid window is targeted to open July 16 and close Sept. 18. The full timeline can be found on dmecompetetivebid.com.