Industry: Round One Rates Add Up to Trouble

ATLANTA

The fees are in, but the jury's still out when it comes to the impact competitive bidding will have on the home medical equipment industry, according to stakeholders who got their first look last month at Medicare's reimbursement rates for round one of the program.

On March 20, CMS revealed its new allowables, with average reductions across the 10 first-round product categories at 26 percent. The agency also said 64 percent of the winning bidders fell into the small business category, surpassing its original 30 percent contract target for small suppliers.

According to CMS, the average savings from Medicare's current fee schedule in each category is:

• Oxygen and oxygen equipment: 27%

• Standard power wheelchairs, scooters and related accessories: 21%

• Complex rehabilitative power wheelchairs and related accessories: 15%

• Mail-order diabetic supplies: 43%

• Enteral nutrients, supplies and equipment: 26%

• Continuous Positive Airway Pressure devices, respiratory assist devices and related supplies and accessories: 29%

• Hospital beds and accessories: 29%

• Negative pressure wound therapy pumps and related supplies and accessories: 14%

• Walkers and related accessories: 27%

• Support surfaces, such as specialized mattresses to help people with pressure ulcers: 36%

“We were overpaying” for many of the items now included in competitive bidding, CMS' Acting Administrator Kerry Weems told reporters at a press briefing announcing the rates.

While Weems pegged potential savings at $1 billion a year once the program is in full swing, others raised serious questions about its impact on beneficiaries and providers.

“The American Association for Homecare thinks the jury is still very much out on the question of competitive bidding and its impact both on beneficiary access to care and the quality of that care,” said Tyler Wilson, president.

“The CMS perspective seems to be limited to focusing on payment cuts. After July 1 when the program is implemented, we will begin to get a sense of the services that contract providers may have had to eliminate in order to meet CMS' singular concern about home medical equipment pricing.”

Even some providers that won their bids had reservations about what the program could mean to the industry.