Under Proposed Rule, HME Providers Face Multiple Changes

WASHINGTON—The proposed rule for 2026 home health payments that the Centers for Medicare & Medicaid Services released earlier this month includes a wide range of changes that will impact home medical providers, including updates to competitive bidding, accreditation requirements and prior authorization policies. The American Association for Homecare (AAHomecare) analyzed the rule and highlights several significant changes to be aware of; some highlights are below. Public comments will be accepted on the rule through August 29.

Bringing Back Competitive Bidding

The proposed rule lays out several items related to the competitive bid program, including: 

• Potentially adding CMS and Insulin Pumps to the bid program: The proposal would change the payment category for Class II Continuous Glucose Monitors (CGMs) and insulin pumps to “frequent and substantial servicing” for competitive bid areas (CBAs) and non-CBAs. Payment would change to a continuous monthly rental, and supplies would be included in the monthly rental rate. Other components would phase Class II CGMs and insulin pumps into a national CBP because they are usually shipped (and shipping costs don’t vary by location); exclude insulin pumps used with Class III CGMs because they are excluded by law; and limit payment for Class III CGMs used with insulin pumps to the same level as Class II CGMS plus pumps. “This is the first instance where CMS has officially stated their interest in adding CGMs and insulin pumps to the Competitive Bidding Program,” AAHomeCare told members.
• Saying CMS has the authority to add some product categories to the bid program: In the proposal, CMS clarifies the definition of “medical equipment items” to include ostomy, tracheostomy and urological supplies, even though it previously believed that the part of the law defining what can be included in the CBP was ambiguous. “CMS highlights the increased utilization, high payment rates and high improper payment rates as reasons to qualify the supplies to be included to be CBP,” AAHomecare writes.
• Adding “remote item delivery” to the CBP: Remote item delivery (RID) would apply to items shipped or delivered to a beneficiary’s home or picked up at a local storefront or pharmacy. The proposed rule would create either one national RID or regional ones combining several CBAs. “This program is similar to the national mail-order program, but would include items that are not typically picked up by the beneficiary at a supplier location,” AAHomecare writes.
• Changing bid rules and calculations: There are a range of suggestions, including changing the winning bid from the maximum winning bid to the 75th percentile of winning bids and reduce the number of contract winners by 25%, changing contract thresholds, limiting bid amounts for items including in previous rounds to no more than 110% of previous or the unadjusted fee schedule; and requiring less financial documentation in bid submissions.

Changes to Accreditation

The proposed rule also would make regulatory changes to Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) accreditation policies and requirements for accrediting organizations (AO), including:

• Increasing the frequency of surveys and reaccreditations. Under the proposal, suppliers would need to be surveyed and reaccredited at least once every 12 months, compared to the every three years required now. They may also direct Aos to conduct surveys at any time, including between cycles, and no longer allow them to accredit new suppliers after three months of operation without a survey.
• Allowing more authority to revoke supplier numbers. The rule expands possible reasons to retroactively revoke a supplier number and would allow revocation if the beneficiary attests they never received the item or services listed in a claim.
• Changing enrollment documentation requirements. The rule would update who signs documents, who is legally responsible for accuracy and gives CMS the right to request additional documents.

Prior Authorization 

Under the proposed rule, DMEPOS suppliers would be exempt from prior authorization if they meet at least 90% provisional affirmation during initial or periodic assessments and are consistently in compliance with Medicare requirements.