Home Care Leaders to CMS: Bidding Program ‘Profoundly Flawed’

The Centers for Medicare and Medicaid Services (CMS) is pushing a “profoundly flawed” system through its proposed changes to the durable medical equipment orthotics, prosthetics and supplies (DMEPOS) competitive bidding program, the American Association for Homecare writes in a recent letter to the agency.

CMS’ proposed rule seeks to use single payment amounts (SPAs) from the DMEPOS competitive bidding program to adjust Medicare payment rates in areas outside the competitive bidding areas (CBAs).

Instead, AAHomecare proposes the agency use the clearance price — or pivotal bid — of an item in a product category. The pivotal bid would more accurately reflect bidders’ cost of doing business in a CBA than the SPAs, which are set at the median of all winning bids.


“SPAs are the product of a profoundly flawed competitive bidding program and do not reflect the true cost of doing business in a CBA or group of CBAs,” AAHomecare writes. “They should not be used to establish Medicare payment rates in areas outside CBAs.”

In particular, the association points to challenges that may arise in rural areas, noting that CMS should incorporate supplemental payments in the form of add-ons to the basic reimbursement rate in areas outside of CBAs. Without supplemental payments, there may be less access to DMEPOS for beneficiaries in certain areas.

“Suppliers have closed facilities in hard-to-service areas because they can no longer offset the cost of running these locations with revenue from other branches,” AAHomecare writes. “This is a tangible threat to access for beneficiaries outside CBAs and a direct result of the austere payment rates under the bidding program.”


To read AAHomecare’s letter to CMS, click here.

Written by Emily Study