WASHINGTON, D.C (May 14, 2021)—Following the Centers for Medicare & Medicaid Services’ (CMS) decision to not implement bids set by Round 2021 for most product categories, home medical equipment (HME) suppliers remain subject to Medicare rates that are largely based on bids submitted in 2015. While policymakers have granted health care providers welcome measures of relief to help offset cost and operational challenges posed by the COVID-19 pandemic, underlying reimbursement rates have not been significantly adjusted in six years and do not reflect the market reality the industry faces.

HME can’t continue to accept the status quo for Medicare reimbursement rates, as well as for Medicaid programs and other payers who peg rates to the Medicare fee schedule. The time is right for meaningful adjustments to Medicare reimbursement rates.

AAHomecare has been in close contact with key legislators and committee staff to set the stage for an advocacy campaign for more sustainable Medicare reimbursement rates in former CBAs and other areas. Specifically, AAHomecare proposes the following Medicare rate structure for the major HME product categories that were removed from Round 2021:

  • 90/10 blended rate for former competitive bidding areas (CBA)—Using a similar methodology to the 50/50 blended rates for rural areas and 75/25 blended rates for other non-CB areas currently in effect, AAHomecare is recommending that former CBAs receive 90% adjusted and 10% unadjusted rates (90/10 blended rates). This approach will provide an average of 15% increase for the top HCPCS code of each product category and is consistent with rate relief policies in rural and non-rural areas. 
  • The 90/10 Blended Rates will be applied to all items formerly covered under the bidding program. The average impact of a 90/10 blended rate for the 94 top HCPCS codes across 13 categories can be found here. A selection of examples from that list are shown with additional detail below. Note: these figures do not take into account the April 2021 increases for oxygen stemming from the budget neutrality fix, so actual O2 rates will be slightly higher. 
  • AAHomecare will also seek permanent adoption of currently-in-effect 50/50 blended rates for rural suppliers and 75/25 blended rates for non-rural, non-CBA suppliers.

Chart of reimbursement rates

“CMS delayed a new round of bidding for two years and then subsequently scrapped most of the bidding program because bids based on the product costs and market conditions faced by HME suppliers didn’t result in further rate reductions,” said Tom Ryan, AAHomecare president and CEO. “It was clear that the HME sector was due for significant rate adjustments even before the COVID-19 pandemic hit. Now product and operational costs are even higher and the need for market-based rates is even more evident.”

“HME suppliers can’t incrementally pass along rising costs to patients under a mostly fixed reimbursement fee schedule, so a substantial adjustment is needed to bring Medicare rates back into line with the market reality our industry faces,” added Ryan. “Given the failure of the last bidding round and the need to strengthen our nation’s ability to provide cost-effective care to seniors and other individuals at home, now is the time to get HME reimbursement policy right.”

“We have an opportunity to establish reimbursement rates that will allow HME suppliers to play a major role in supporting America’s fast-growing cohort of seniors and helping them stay close to their families and communities,” said Ryan. “We have to take advantage of this chance to secure a long-term, sustainable rates for HME.”

Visit aahomecare.org for more information.