President Signs MACRA (SGR/Doc Fix), Approving Binding Bids Provisions

Posted on in HME Government Issues

Late last week the president signed H.R. 2, the Medicare Access and CHIP Authorization Act of 2015 (MACRA), repealing the Sustainable Growth Rate (SGR) formula and reforming Medicare payment policy for health care providers. The bill is well known for reforming for physician services, linking future payment updates to quality, value measurements and participation in alternate payment models. Most important to DME are the policy provisions that make changes to the DMEPOS Competitive Bidding Program. ReedSmith’s MARCA Client Alert summarized the binding bids change. “As adopted, MACRA requires Medicare suppliers that bid under a DMEPOS competitive bidding program to obtain a $50,000 – $100,000 “bid surety bond” for each competitive bidding area (CBA). If the bidder is offered a contract for any product category in the CBA, and the supplier’s bid for the product category was at or below the median composite bid rate that was used to calculate single payment amounts, the bid bond would be forfeited if the supplier did not accept the contract. In all other cases, the bid bond would be returned to the bidder. This provision is intended to prevent suppliers from submitting – but not accepting -- “low-ball” bids that artificially drive down prices to improve the supplier’s chances of being offered a contract.” John Gallagher, vice president of VGM Government Relations, commented “We’re very pleased to see these changes, but corrections to the timeline are needed.” Gallagher continued, “The implementation date is not set until 2017 at the earliest and 2019 at the latest. There will be a great opportunity to push for correction language to change the timeline, because many legislative avenues will open up following the repeal of SGR.” In addition to binding bids, MACRA also requires licensure for providers participating in the competitive bidding program. VGM will soon provide members with ways to improve the binding bids provision. Look for ways to message Congress in our upcoming legislative updates. Until then our efforts continue to stop the nationwide rollout of competitive bidding and improve the audit process. Visit our action center to email your member of Congress today.