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CMS Release of Competitively Bid 2017 Rates Raises Red Flags

The Centers for Medicare and Medicaid Services has released fee schedules for 2017, which brings a mixed bag of changes. As yesterday’s Legislative Update reported, the fee schedule adjustment, which applies to non-competitively bid codes, showed that there was a small increase in the Consumer Pricing Index (CPI), which is the cost of living for urban areas. The CPI/U net adjustment of .7 percent does not apply to bid items within a CBA. These single-payment amounts are fixed by contract for the term. However, the adjustment is clear to all non-bid items. For example, prosthetics would be reimbursed at .7 percent higher than last year.

The other side of the coin shows other changes that have raised red flags for the entire industry, specifically stationary oxygen. Simply put, CMS is using a statute from 2006 which applies a budget neutrality offset for portable oxygen which led to a lower reimbursement for stationary equipment. This offset, in addition to rates set by competitive bidding, means that the reimbursement rates for E1390 are set to be even lower for 2017. CMS has continued to find any way possible to shrink reimbursements for HME providers, which should not come as a surprise to anyone in the industry. In multiple rural areas, the rates are lower than the competitively bid regional rates. The following are just a few:

Region CBA Code CBA Rate January 2017 Rural Rate % Difference CBA-Rural
Plains Kansas City-Overland Park-Ottawa, KS E1390 $79.23 $77.16 -2.6%
Far West Salt Lake City, UT E1390 $80.40 $77.16 -4%
Great Lakes East. St. Louis, IL E1390 $79.99 $77.16 -3.5%
VGM and other industry stakeholders are standing together in opposition to this double-dip reimbursement cut. Providers in urban and rural areas are continuously being forced to do more with less to care for patients. CMS has been continuing to cut reimbursement rates by any means necessary, which is forcing providers to reduce services and leaves patients with limited access to care, especially in rural America. This standard of constant cuts to reimbursements is unsustainable and is forcing patients to go without the vital care that they desperately need.

This fight will continue into 2017 as a new administration will take and new leadership of the agency will likely be implemented. It will take a fresh perspective and new ideas by CMS to preserve access for patients across the United States. VGM looks forward to connecting the stories and concerns of providers and patients to CMS and Congress in the New Year so providers have the necessary resources to provide the high quality of care that their patients deserve.