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Breaking Down the Basics of the ESRD Rule Release

Posted on in VGM News, Billing/Reimbursement, HME Government Issues, Legislation, Government and Advocacy

Many of us are still digesting the 360 pages of the End Stage Renal Disease announcement that includes information about the DMEPOS competitive bidding program and reimbursement. To help summarize these changes, VGM’s Mark Higley and Collin Brecher put together a video to help providers better understand what these changes mean for their business.

Click here to view the video.

With the release of the End Stage Renal Disease (ESRD) proposed rule, we got a glimpse of what the future of competitive bidding will look like for the DME industry. Upon first glance through the rules, VGM is breaking down the major provisions and what it means for DME suppliers.

  • Beginning Jan. 1, 2019, there will be three different methodologies, depending on the area a patient resides. Because CMS has not announced a 2019 competitive bidding program, some rules have changed until a new round of bidding begins.
    • Within a competitive bidding area: Any enrolled supplier can provide equipment to patients who reside in a competitive bidding area. The items will be paid at the current single payment amount (SPA) with the percentage addition of CPI-U (in layman’s terms this is to account for inflation, which would only translate to approximately a 1.5% increase the following year). For those with a current contract, it appears you will be off the hook for accepting Medicare patients if you choose.
    • Non-bid and non-rural areas: These are the smaller metropolitan, densely populated areas. Patients in these areas fall under the “100% adjusted” amount. This means these areas see no additional reimbursement increase, other than the current rates. VGM has been vocal about what CMS considers “rural,” and this is a major area where the rule falls short. We’ll continue to argue for a full application of the blended rate to all non-bid areas. CMS is also soliciting comments to consider expanding this and would be effective “on or after Jan. 1, 2021.”
    • Rural and non-contiguous: For patients residing in a rural or non-contiguous area, suppliers will see an extended increase of the “blended rate,” which is where CMS is currently paying, thanks to relief of the interim final rule back in May. This increase is effective from Jan. 1, 2019, through Dec. 31, 2020. This maintains rates at the January 2016 levels when the first cut took place.
  • Lead item bidding will be implemented. Instead of bidding on dozens of codes per product category, you bid on one major item within the category. So, for the oxygen category, you bid only on E1390 and that’s it. The other codes take a percentage of the eventual payment. VGM sees this is as a positive thing, making this bidding process simpler.
  • Payment classes for portable liquid oxygen, portable gaseous oxygen, and high flow portable liquid oxygen have been added. This will come into play in the next round of bidding, so no rate changes for the time being on these items.
  • There have been changes on how CMS is going to be paying for multi-function ventilators (combining a ventilator, concentrator, nebulizer, suction pump, and cough stimulator). While we are still analyzing this, we are unsure if this will have much of an impact on reimbursement.

Overall, we are pleased to see that CMS is making positive steps to improve patient access and provide stability to the provider community. Unfortunately, there is a large segment of patients left out of these changes. We will continue to work with policymakers to narrow this gap and provide comment templates for suppliers to give feedback on these policy proposals – suppliers’ best opportunity to provide opinions directly to CMS. Stay tuned for more resources, guides, and videos on the changes of competitive bidding through VGM’s social media and VGM.com. 

Any questions may be directed towards the VGM Government Relations team to [email protected] or [email protected]