BALTIMORE — In an announcement the HME industry has been
both waiting to hear and dreading, the Centers for Medicare and
Medicaid Services has released new payment rates for the Round 1
rebid. The reimbursement reductions average 32 percent across all
The agency's Competitive Bidding Implementation Contractor
posted the rates on its target="_blank">website this afternoon, including the
single-payment amounts by code and by competitive bidding area
(CBA). Charts also show the distribution of contract offers for
each product category in each CBA.
The new rates are scheduled to take effect Jan. 1, 2011, in the
nine Round 1 cities: Charlotte, Cincinnati, Cleveland, Dallas,
Kansas City, Miami, Orlando, Pittsburgh and Riverside, Calif.
While the exact rates vary by CBA, examples of average pricing
- Oxygen concentrator: The current allowable averages $173.17 per
month, with the new payment at $116.16.
- Hospital bed: The current allowable averages $127.12 per month,
with the new payment averaging $80.35.
- Diabetic supplies: The current allowable averages $75.32 per
month, with the new payment averaging $33.44.
According to Jonathan Blum, CMS deputy administrator and
director of the Center for Medicare, once it is fully implemented,
the competitive bidding program "is expected to save more than $17
billion over 10 years."
For a power wheelchair, Blum noted on a media call, Medicare
currently pays $3,641, but the new rate will be $2,554 "or a
savings of about 30 percent, so again, we see very significant
savings that will accrue starting Jan. 1, 2011."
Blum said CMS will offer 1,287 contracts to 364 suppliers with
"It's important to point out that we expect that of the vast
majority of suppliers that will be offered contracts, 72 percent
already have market presence in those areas," Blum said, adding
that CMS also expects that contracts will be offered to 48 percent
of suppliers who are deemed to be "small" suppliers, or those with
gross revenues of less than $3.5 million.
"It's also important to keep in mind this is not just about the
nine regions," he said. "Congress requires CMS over time to expand
the program to 91 parts of the country starting in 2011, and by
2016, CMS must assure that all parts of the country are either part
of the competitive bidding program or that the fee schedule is set
at the competitive bid rate." (Round 2 bidding will begin in 2011,
with implementation slated for 2013.)
CMS is sending emails today to bidders who are being offered
contracts advising those companies that a FedEx package will be
delivered Friday (July 2) informing them their bid has been
accepted. Those providers will have 10 business days to accept or
decline the contracts.
If the contract offers are not accepted, the CBIC will offer
contracts to other providers until demand for the CBA is met.
Those companies whose bids were not accepted will not receive
notice until the contracting process is completed in September,
when CMS said it expects to release the names of contract
View the entire
target="_blank">competitive bid rate announcement on the CBIC
website. Read CMS' press release on the rebid rates.
View more competitive bidding