CQRC Applauds Competitive Bidding Reform in DMEPOS Proposed Rule

The new rule proposes long-overdue changes the flawed competitive bidding program and will protect access to home respiratory therapy equipment and services.

Washington, DC, July 12, 2018 --(PR.com)-- The Council for Quality Respiratory Care (CQRC) – a coalition of the nation’s leading home oxygen therapy provider and manufacturing companies – welcomed the release of the “End-Stage Renal Disease Prospective Payment System, Payment for Renal Dialysis Services Furnished to Individuals with Acute Kidney Injury, End-Stage Renal Disease Quality Incentive Program, Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Competitive Bidding Program (CBP) and Fee Schedule Amounts, and Technical Amendments to Correct Existing Regulations Related to the CBP for Certain DMEPOS” Proposed Rule by the Centers for Medicare & Medicaid Services (CMS). The proposed rule would update the competitive bidding and payment process for DMEPOS and fix a longstanding flaw that resulted in artificially low reimbursement rates for home respiratory therapy and equipment.

“The CQRC is pleased the Administration has worked closely with the home respiratory therapy community, including suppliers, physicians, patients, and manufacturers, as well as other DME suppliers to develop the proposed rule,” said Dan Starck, Chairman of the CQRC.

“The collaborative manner in which the new Administration has engaged with industry is greatly appreciated and well received in helping revise the Medicare DMEPOS competitive bidding program and will help stabilize the benefit for the vulnerable patients we serve.”

For years, Medicare’s DMEPOS competitive program has employed a flawed methodology, threatening patients’ access to the doctor-prescribed oxygen equipment and services they need. In the proposed rule, CMS recognizes that this methodology led to rates for oxygen equipment in some areas that were set below what the majority of suppliers’ actual bids. Echoing a report released by the CQRC in March, CMS indicates it proposes these methodology changes to protect patient access to critically important home respiratory therapies and other equipment and supplies.

The proposed rule would simplify bidding by establishing a single lead item for each product category. It would then determine the payment rates based on the maximum winning bid for the lead product, rather than the previously convoluted median bid methodology. It also appears to recognize the need to separate oxygen and sleep products into two separate categories.

The proposed methodology would allow the rates to be set at the maximum winning bid for the lead product, which is essentially the clearing price. As hundreds of economists have recommended over the years, this approach would provide the true market rate, which was the intention of the Congress in establishing the competitive bidding program. As a result, rates would stabilize and Medicare patients will benefit from increased access to home respiratory therapy equipment and supplies.

“The proposal finally establishes a level playing field and remove the technical issues that artificially lowered the rates,” continued Starck. “It also eliminates the previous requirement that suppliers accept contracts at rates lower than what they actually bid.”

The CQRC also applauds CMS for addressing the problems created when the flawed competitive bidding rates were applied to rural areas the Congress excluded from the competitive bidding program. CQRC appreciates as well that CMS will continue to examine how to address the cost differentials in non-CBAs that are not designated as rural. In the meantime, CQRC asks that CMS extend the transitional blended rate in these areas as well.

“The CQRC is pleased that CMS has also listened to the concerns and provided continued relief to the changes in rates in rural areas,” added Starck. “These proposed changes are critical to protecting access to home respiratory therapy services for beneficiaries outside of the competitive bidding program, but they also need to be extended to the non-CBAs that are not designated as rural.”

About the CQRC
The CQRC is a coalition of the nation's seven leading home oxygen therapy provider and manufacturing companies. To learn more, visit cqrc.org and follow CQRC on Twitter at @TheCQRC.
The Council for Quality Respiratory Care
Sarah Rhoades