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Nationwide Competitive Bidding - DME Bundling - CMS seeks comments
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3/13/2014 at 3:30:52 PM GMT
Posts: 9
Nationwide Competitive Bidding - DME Bundling - CMS seeks comments

CMS Seeks Input on Next Phase of Competitive Bidding Implementation  


On February 24, CMS released a fact sheet  announcing they are seeking public comment on nationwide implementation of the DME Competitive Bidding Program.

As we have known all along, CMS is required by law to implement this program by 2016 nationwide. What we have not known is the methodology for doing this – Will it be a bid? Will they just apply new rates nationwide? Will there be any exceptions? 

According to the release, CMS is seeking input from industry stakeholders on:

  • methodology it would use to comply with the statute when using competitive bidding pricing information to adjust payment amounts in non-competitive bidding areas. 
  • ideas for potentially simplifying the payment rules and enhancing beneficiary access to items and services under the competitive bidding programs for certain durable medical equipment (DME) and enteral nutrition.

Some of the questions they are asking include: 

  • Do the costs of furnishing various DMEPOS items and services vary based on the geographic area in which they are furnished?
  • Do the costs of furnishing various DMEPOS items and services vary based on the size of the market served in terms of population and/or distance covered or other logistical or demographic reasons?
  • Should an interim or different methodology be used to adjust payment amounts for items that have not yet been included in all competitive bidding programs (for example, items such as transcutaneous electrical nerve stimulation (TENS) devices that have only been phased into the nine Round 1 areas thus far)?
  • What problems would occur if all DME items were bundled into a single monthly rental amount regardless of which specific items we utilized by the beneficiary (similar to how many hospice companies rent DME currently)?

CLICK HERE to Read the News Release.

CLICK HERE to read the Advance notice of proposed rulemaking (ANPRM). Pay close attention to pages 20 – 25!

CLICK HERE to take a survey being hosted by VGM.

3/13/2014 at 3:47:32 PM GMT
Posts: 0
Can we work with CMS to help them achieve their goal?

Like most CMS proposals, the devil is in the details when it comes to the implications of the Proposed Rule Change notification given regarding expansion of competitive bidding savings and the possibility of bundled payments for DME.  It is pretty clear that these two topics are related but separate, and that they are not whims of thought for CMS, but the front-running options that CMS is leaning toward implementing.  CMS is required by current federal law to expand the savings of Competitive Bidding to the rest of the nation.  This means that it is not an option for CMS to stop with Round 1 and 2.  They MUST expand.  Given that this is a requirement, it is going to happen, absent legislation to the contrary.  I think it is time for our industry to take a different approach to affecting change in federal reimbursement methodology.  For years, as an industry we have tried appeasement (remember the 9.5% cut?) , hiding our head in the sand (“this Competitive Bidding thing will never be allowed to procede/remain in place”), and elimination.  Elimination of a federally mandated program  is the equivalent of standing on the train tracks in front of a speeding train to “stop it”.  That isn’t going to go very well for us (indeed, looking at where we are right now, I should say that it HASN’T gone very well).

I think instead of elimination, we need to approach CMS in a constructive manner to help them achieve their goal of a more efficient and less costly program implementation in a manner that is not so destructive to our industry and to patient care.  In the case of this expansion of CB savings and bundling of payments, I think that means resisting the urge of a knee jerk reaction of “NOOOOOOOOOO!!!!!!!!” and instead offering constructive comments that identify the potential dangers, but don’t disregard the potential positives.  These programs, like most, have the potential to do great good or great harm depending upon how they are implemented and what the details are.  At least on the surface, CMS is approaching us in good faith to ask for help in understanding where the lines should be drawn to distinguish opportunity from danger.  Instead of trying to take away their chalk so that the lines can’t be drawn, let’s understand that lines WILL be drawn, and let’s try to help them draw the lines in a less harmful way.  I offer some examples below.

  1. Consumable supplies that are not directly related to a piece of equipment should NOT be bundled. 
    1. Enteral nutrition is composed of formulas that vary widely in both unit cost as well as amount consumed.  Both of these factors are outside of the provider’s control and are also unknown until a specific order is received. This makes any bundling system a dangerous prospect.  What happens when a patient needs a formula that costs more than the reimbursement, or they need more per month than the reimbursement will buy regardless of the specific formula?  Access issues would abound.  Also, providers are incentivized by the current methodology of billing/reimbursement to ensure that patients stay on a routine schedule of use of the formulas so that the billing frequency doesn’t get messed up.  Under a bundled scenario, we would instead be disincentivized to promote regular use and resupply, because this would lead to more cost for the provider without any increase in payment.
    2. Ostomy, Urological supplies, wound care, diabetic supplies, are all similarly consumable supplies that should not be included in this program.
  2. Consumable supplies that ARE directly related to a piece of equipment should be an area of concern to be careful with.
    1. CPAP supplies are a good example here.  They relate directly to the PAP device.  Providers are currently incentivized to implement compliance and resupply programs because this will result in not only better patient care, but increased revenue.  If you remove the increase in revenue by bundling these resupply items, then these supplies become a cost with no reimbursement to the provider.  Oxygen supplies (tubing, cannulas, regulators, etc.) are a good example of related supplies that we are used to providing and should not be a problem under a bundling scenario.  This is largely because of the significantly lower cost of these supplies.  Would we all begin to provide $5 PAP masks?  I can’t imagine that would lead to good outcomes
  3. Rural and semi-urban areas between current CBAs are required by current law to have an impact upon their reimbursement rates using information from rounds 1 and 2.  Should CMS hold a round 3 and 4 to cover all “in-between” areas?  I think the bid process is dependent upon a greater number of providers than are present in such markets.  What method should be used then?  Simply applying an average of the CB rates from round 1 and 2 is one method, though it seems to imply there is no difference in operating in rural areas versus urban areas.  What do you think?  Make it known.
  4. Selective contracting….this is at the heart of much of the fear and angst surrounding Competitive Bidding.  When you select only SOME providers to receive a contract you leave all others out of the program and this is a scary prospect and in many cases ends up seeming almost arbitrary.  However, it is precisely this selectivity that allows the contracted providers to reduce costs enough to survive on the significantly lower rates.  Not only does this provide a growth in volume, but also an improvement in efficiency of operations.  Without selective contracting, no one can make the lower rates work.  I think we’ve all probably seen this effect in some ways with some of the private insurers who have lowered reimbursement without limiting contracts.  What are your thoughts and fears about selective contracting versus “any willing provider”? 
  5. One bundle, or several?  Should ALL equipment be reimbursed in one bundle? I think there needs to be one GENERAL equipment bundle that includes the majority of equipment.  But Oxygen equipment (which is much more capital intensive) should be separate.  Similarly, ventilators should be separate. Custom mobility should be separate, as well.  I think we could have a General Bundle, with “add-ons” for Oxygen, for Complex Respiratory, and for Complex Mobility.  I personally believe that the qualification criteria for these “add-ons” should be diagnosis-based, rather than documentation based.  If a patient has a severe respiratory diagnosis, then we should qualify to bill for the General category, plus the Complex Respiratory add-on, for instance. 
  6. What gains do we get as providers?  I think the biggest gain is to change or largely eliminate the cumbersome and COSTLY and ERROR-PRONE requirements of documentation and chart notes for DME billing.  ALL parties (providers, doctors, CMS, patients) would benefit from a diagnosis driven reimbursement methodology.  We could reduce documentation and billing costs.  We could improve timeliness of intake procedures.  We would be able to reduce uncertainty surrounding payment.  Fraud and abuse would become more transparent.  The LCDs and NCDs that have been developed would still have a place/use.  Instead of being used for every claim to justify payment, they would be used by providers to justify the exceptions when an item that has been ordered does NOT qualify.  Instead of CMS using the LCD to determine whether to pay/recoup, providers would use the LCD to determine whether they are obligated to deliver a piece of equipment given the patient’s condition.  This becomes the safeguard against uncontrolled ordering of equipment.

If you are a DME provider and not thinking about this proposal and making your opinions known, you will be subject to the results of a process you did not get involved in.  That is how Competitive Bidding was inflicted on this industry.  This CMS request for comments is your invitation to participate!

3/14/2014 at 2:53:35 PM GMT
"If you are a DME provider and not thinking about this proposal and making your opinions known, you will be subject to the results of a process you did not get involved in. That is how Competitive Bidding was inflicted on this industry. This CMS request for comments is your invitation to participate!"

I think that Jason has got it 100% right in saying this. As GAMES members and DME providers we are obligated to voice our opinions when asked. Tuesday Morning GAMES will host a call to offer all members a chance to give leadership their feedback on the ANPRM.
I encourage all members to participate.

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