CMS Cites Bidding Savings of 37 Percent For DME Items in Round 1 'Recompete'

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By Mindy Yochelson  

Oct. 1 --The Centers for Medicare & Medicaid Services said payment amounts for durable medical equipment items in the second group of contracts for Round 1 of the competitive bidding program will be an average 37 percent lower than fee schedule amounts.

The single payment amounts announced Oct. 1 were for the six DME items in the “recompete” of Round 1, which took place in nine geographical areas in 2012.

The CMS is undertaking the contracting process for suppliers that were offered contracts for the items in the nine areas.

The items that were bid were enteral nutrients, equipment and supplies; external infusion pumps and supplies; general home equipment and related supplies and accessories; negative pressure wound therapy pumps and related supplies and accessories; respiratory equipment and related supplies and accessories; and standard mobility equipment and related accessories.

Round 1

The agency initially went through Round 1 bidding for the nine areas, and payment amounts went into effect in January 2011. However, those contracts are due to expire at the end of 2013 and were rebid. Existing payment amounts will be replaced with the new amounts in January 2014.

At the time the initial Round 1 was announced, the CMS said that average savings would be 32 percent lower than fee schedule prices.

“Suppliers in the nine areas will experience an even deeper cut in some areas and for some items than they have for the last three years,” Kim Brummett, senior director, legislative affairs, for the American Association for Homecare, told BNA.

The lower rates will “force providers to take a closer look at the single payment amounts if they are offered a contract” but still want to make a sound business decision, she said.

Rebid Details

The “rebid” process for the nine areas of Round 1 took place in the last quarter of 2012 .

Average weighted savings for the six item categories ranged from 21 percent for enteral nutrients to 47 percent for general home equipment, according to CMS charts.

Savings also varied by area, with the Charlotte, N.C., area realizing 13 percent in savings for external infusion pumps and a 53 percent savings calculated for general home equipment in Dallas.

Meanwhile, when payment amounts for Round 2 of the bidding program--which covers 91 areas--were announced earlier this year, the CMS said the amounts were on average 45 percent less than Medicare's fee schedule amounts .

The large Round 2 went into effect in July.

Congress in 2003 mandated that Medicare replace the current fee schedule payment methodology for selected DME with a competitive bidding process as a Medicare savings measure.