Positive Bid-Ceiling Changes Announced in Latest CMS Bid Program Adjustments

WASHINGTON, D.C. (June 30, 2016)—On June 24, CMS published the proposed rule titled, CY 2017 Changes to the End-Stage Renal Disease (ESRD) Prospective Payment System and Quality Incentive, Durable Medical Equipment, and DMEPOS Competitive Bidding Programs. Within this rule, CMS announced several updates to the competitive bidding program. CMS is considering several methodologies to adjust fee schedule amounts for certain product categories that have similar items with different features. For example, E0130, a rigid walker without wheels is more expensive under Round 2 2016 SPA than E0135, a folding walker without wheels even though in the 2015 fee schedule, E0135 had a higher rate. CMS is proposing to address this price inversion by applying a weighted average of all the items that are similar but have different features to adjust the SPA. In addition, CMS is proposing to prevent price inversions by using a lead item bidding method where the bidding supplier will submit a bid based on the item that is used the most.

CMS also proposed to change the bid ceiling to the unadjusted 2015 Fee Schedule amount to allow prices to fluctuate in future rounds. This is a big win for the industry!  CMS had originally indicated the bid ceilings would be set at the current SPA levels. In addition, starting in 2019, round 1 and round 2 will be combined.

AAHomecare’s summary of the proposed rule can be found here.

Visit aahomecare.org for more information.