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Competitive Bidding Relief – “PACT Act” introduced in U.S. House

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December 8, 2015

Contact: John Gallagher, 319-504-6470

Competitive Bidding Relief – “PACT Act” introduced in U.S. House

WASHINGTON- Today U.S. Rep. Tom Price (R-GA) introduced the Protecting Access through Competitive Pricing Transition Act of 2015 (PACT Act), H.R. 4185. The bill, if passed, will give financial relief to rural home medical equipment suppliers who are expecting significant reimbursement cuts on Jan. 1, 2016, when the durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) competitive bidding program is expanded.

The expansion of previously bid prices in metropolitan areas to rural ones have HME providers re-evaluating their business models, cutting back on staff, shortening delivery distances and reducing inventory in order to make up for the lost revenue.

Joining Rep. Price in cosponsoring the legislation are U.S. Reps Cathy McMorris Rodgers (R-WA), Tammy Duckworth (D-IL), Tim Ryan (D-OH), Dave Loebsack (D-IA), Kristi Noem (R-SD), Marsha Blackburn (R-TN), Peter King (R-NY), Ryan Zinke (R-MT) and Scott Tipton (R-NM). The PACT Act bill provides relief to providers by doing the following:

  • Establish a 30 percent adjustment for rural and non-bidding areas (in place of the 10 percent proposed).
  • Provide a two-year phase-in for national price adjustments effective 2017 (in place of the six months proposed).
  • Establish the bid limit ceiling for competitive bid contracts that begin on or after January 1, 2017 at the unadjusted fee schedule payment rates as of Jan 1, 2015. (in place of CMS proposal for cap at previous bid rates).
  • Implement the Market Pricing Program (MPP), a state of the art auction system that is designed to save as much money at the competitive bidding program. These bids would be binding and based on the clearing price instead of the median price. This auction system is supported by 244 economists and auction experts, including five Nobel laureates.

 

Industry stakeholders were pleased with the announcement. “This bill is a life line for rural providers and the patients they serve,” said John Gallagher, vice president of VGM Government Relations. “It’s a common sense approach to stop the devastation of rural health care by a poorly devised and thought out bureaucratic program.”

The reimbursement cuts scheduled are the continuation of the phased Medicare DMEPOS Competitive Bidding program that has been criticized widely for using flawed bidding procedures, resulting in widespread business closures since 2007. The program, which chooses “winners” and “losers” through the defective bidding process, has created access issues for thousands of senior citizens and people with disabilities who rely on home medical equipment and services.

The PACT Act is a companion bill to the Senate’s November released bill titled the DME Access and Stabilization Act of 2015, S.2312. View the DME Access and Stabilization Act of 2015 announcement here. Both bills are expected to be included in the 2015 Omnibus spending packages.