State of the HME Industry in 2015 and Beyond:
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1 State of the HME Industry in 2015 and Beyond: Predictions and Commentary Relative to Industry Trends, Reimbursement, Bundled Payments & More Annual Big Sky Convention 2015 Reimbursement & Regulatory Track Wednesday August 12th, 2015 Fairmont Hot Springs Resort
2 My Contact Information: Mark Higley, Vice President - Regulatory Affairs mark.higley@vgm.com O: C:
3 Let s get started today with how many of us are still out there?... Supplier Type Code Supplier Type Code Description Count of Suppliers with Active Med ID (11/01/2010) Count of Suppliers with Active Med ID (11/01/2011) Count of Suppliers with Active Med ID (11/01/2012) Count of Suppliers with Active Med ID (11/01/2013) Count of Suppliers with Active Med ID (11/01/2014) 54 MED SUPPLY COMPANY 9,438 9,503 8,880 8,222 7,881 A6 MEDICAL SUPPLY COMPANY WITH RESPIRATORY THERAPIST 2,109 1,972 1,941 1,876 1, MEDICAL SUPPLY COMPANY WITH ORTHOTIC-PROSTHETIC MEDICAL SUPPLY COMPANY WITH ORTHOTIC PERSONNEL MEDICAL SUPPLY COMPANY WITH PROSTHETIC PERSONNEL B3 MEDICAL SUPPLY COMPANY WITH PEDORTHIC PERSONNEL B1 OXYGEN & EQUIPMENT MEDICAL SUPPLY COMPANY WITH REGISTERED PHARMACIST TOTAL 13,163 13,088 12,454 11,679 11,326
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8 The raw data.
9 Those are locations (NPIs) (and NOT Companies!) So how do we find where they are and who they are?
10 Start Here!
11 Click here!
12 This is what you ll see!
13 This file is updated weekly! Hence you can access it real-time on the Internet or You can download and save as an alternative. It is BIG! 60MB I have the Big Sky (3 state) files available for download upon request! There are more than 800 Big Sky locations with supplier numbers. BUT many are chain pharmacy, big box, physicians and opticians. YES, you can sort and filter by supplier type (via product line) to determine real HMEs.
14 But it s simply Excel; you can widen columns, freeze the top frames
15 This spreadsheet may be copied/edited and is easily manipulated via the Data/Sort function. For example, you may wish to copy a certain state or region and obtain a listing of all suppliers in the area by city to determine competitor locations, alternate referral needs (e.g. you are out of stock or are considering subcontracting for bidding purposes), prospecting (e.g. for your Big Sky state association), advocacy issues, and many other potential reasons. You can also sort these locations as to which suppliers offer certain products for example CPAP. There are 80 product categories in which the NSC recognizes and updates via the 855S format.
16 Any location with a current NCB contract is identified in the first column (by product category). There are 13 competitive bid product categories. This is because Round 1 Recompete had several revisions (new categories or combinations of categories) from Round 2.
17 Many full line suppliers offer dozens of products. Some niche suppliers (think opticians who offer cataract sunglasses) may only be in one or two categories. You will be able to sort these out by a tool I will demonstrate shortly. But let s start first with the NCB data The first 20 columns of this database (A to W) identify the supplier by location/contact detail and to whether the supplier has any competitive bid contracts. It also includes a column (X) as to whether the entity is a participating Medicare supplier. See next slides...
18 EXCEL ROW A B C D Competitive Bid Service Area Company Name DBA Name Address E Address 2 F G H City State Zip I Zip Plus 4 J K L M Phone Oxygen Supplies and Equipment Mail-Order Diabetic Supplies Enteral Nutrients, Equipment and Supplies N O CPAP Devices, Respiratory Assist Devices, and Related Supplies and Accessories Hospital Beds and Related Accessories P Q R S T U V W X Negative Pressure Wound Therapy Pumps and Related Supplies and Accessories Walkers and Related Accessories Support Surfaces (Group 2 mattresses and overlays) Standard (Power & Manual) Wheelchairs, Scooters, and Related Accessories External Infusion Pumps and Supplies General Home Equipment and Related Supplies and Accessories Respiratory Equipment and Related Supplies and Accessories Standard Mobility Equipment and Related Accessories Is Supplier Participating?
19 Example: Suppliers in Idaho and to which contracts (YES or NO) these suppliers have:
20 Beginning with Column K (this is Oxygen Supplies and Equipment) the data option is either NO or YES. If NO this supplier has no competitive bid contract. If YES then the supplier (in this location) has a competitive bid contract for that product category. Both Round 1 recompete and Round 2 product categories follow in columns K through W. Again Remember there were differences in categories between these two rounds and hence the 13 categories. At column X the competitive bid data set ends and, as noted, column X is a YES or NO as to whether the supplier is participating.
21 The next series of columns include all 80 product categories included within the 855S enrollment data. If the supplier location is accredited/credentialed to bill Medicare for the category, the indication is YES. If not NO.
22 Starting with Column Y and ending at Column DA the products are as follows:
23 Automatic External Defibrillators (AEDS) Commodes, Urinals, & Bedpans Continuous Passive Motion (CPM) Devices Dynamic Splints Blood Glucose Monitors & Supplies: Non-Mail Order Blood Glucose Monitors & Supplies: Mail Order Blood Glucose Monitors: Mail Order Gastric Suction Pumps Heat & Cold Applications Hospital Beds: Electric Hospital Beds: Total Electric & Pediatric Hospital Beds: Manual Hospital Beds: Manual & Pediatric Infrared Heating Pad Systems Infusion Pumps & Supplies: External Infusion Infusion Pumps: Implantable & Uninterrupted Infusion Pumps & Supplies: Insulin Infusion Infusion Pumps & Supplies: Implanted Infusion Negative Pressure Wound Therapy Pumps & Supplies Neuromuscular Electrical Stimulators (NMES) Osteogenesis Stimulators Pneumatic Compression Devices Speech Generating Devices Support Surfaces: Pressure Reducing Beds, Mattresses, Overlays, & Pads Support Surfaces (e.g. Air Fluidized bed) Traction Equipment Transcutaneous Electrical Nerve Stimulators (TENS) Units Ultraviolet Light Devices Home Dialysis Equipment & Supplies Hemodialysis Equipment & Supplies Canes & Crutches Patient Lifts Power Operated Vehicles (Scooters) Seat Lift Mechanisms Walkers Wheelchairs & Accessories: Standard Manual Wheelchairs & Accessories: Standard Manual (e.g. Pediatrics) Wheelchairs & Accessories: Standard Power Wheelchairs & Accessories: Standard Power (e.g. Pediatrics and custom cushions ) Wheelchairs & Accessories: Complex Rehabilitative Manual Wheelchair Seating/Cushions Wheelchair Seating/Cushions (e.g. skin protecting seat cushions) Orthoses: Custom Fabricated Orthoses: Prefabricated Orthoses: Off-the-Shelf Breast Prostheses & Accessories Cochlear Implants Facial Prostheses Neurostimulators Ocular Prostheses Ostomy Supplies Somatic Prostheses Tracheostomy Supplies Urological Supplies Voice Prosthetics Prosthetic Lenses: Conventional Eyeglasses Prosthetic Lenses: Conventional Contact Lenses Prosthetic Lenses: Prosthetic Cataract Lenses Enteral Nutrients, Equipment, & Supplies Enteral Nutrients & Supplies for Special Metabolic Needs and Pediatrics Parenteral Nutrients, Equipment & Supplies Limb Prostheses Eye Prostheses CPAP, RADs, & Related Supplies & Accessories CPAP and RADs Supplies (e.g. combination masks) High Frequency Chest Wall Oscillation (HFCWO) Devices Invasive Mechanical Ventilation Intermittent Positive Pressure Breathing (IPPB) Devices Intrapulmonary Percussive Ventilation Devices Mechanical In-Exsufflation Devices Nebulizer Equipment & Supplies Nebulizer Equipment: Ultrasonic and Controlled Dose Oxygen Equipment & Supplies Respiratory Suction Pumps Ventilators, Accessories & Supplies Surgical Dressings Diabetic Shoes & Inserts: Prefabricated Diabetic Shoes & Inserts: Custom Fabricated
24 Now, I recognize that much data may be difficult to comprehend (!!!) What you could do is select just a state or region, and copy it into another blank spreadsheet. Then, using the Filter function (a very simple maneuver) select by product category or competitive bid contract.
25 As an example, I copied all of the Big Sky 3-state suppliers from the master spreadsheet. There are 810 NPI locations!! Again you can copy my file today, or, if you want the most current version, download it per the previous instructions.
26 Now Let s Use the Filter Function!
27 Click Filter and Select a Column (Category)
28 Drop down menu
29 Choose Yes Only & Click OK
30 Of 810 Big Sky Locations, only 161 offer Oxygen!
31 Let s add CPAP to the Filter!
32 The new count is 158; hence most locations in these rural states that offer oxygen also offer CPAP
33 Let s add Walkers & Standard Wheelchairs:
34 And finally let s add semi-electric hospital beds
35 If you add additional products, the number dwindles quickly. So, we could state with some reasonable certainly, that the 3 states collectively - has only about 120 real DME locations that offer a reasonable line of respiratory and mobility home medical equipment in a rural area. And If you sort by company name (not by location) the number is 43.
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38 The Round Two Recompete: My predictions
39 Factors: 1. Respiratory Equipment and Related Supplies and Accessories (includes oxygen, oxygen equipment, and supplies; continuous positive airway pressure (CPAP) devices and respiratory assist devices (RADs) and related supplies and accessories) 2. Standard Mobility Equipment and Related Accessories (includes walkers, standard power and manual wheelchairs, scooters, and related accessories) 3. General Home Equipment and Related Supplies and Accessories (includes hospital beds and related accessories, group 1 and 2 support surfaces, commode chairs, patient lifts, and seat lifts)
40 For many Round 2 recompete bidding companies, these product categories combine products not typically furnished by the supplier in the today s marketplace. For example, HMEs furnishing oxygen and oxygen equipment do not necessarily furnish CPAP devices and RADs.
41 The combining of product categories (e.g., oxygen and CPAP) might result in a reduction in the amount of out-of-area bidders, who, in previous rounds, bid CPAP in virtually all areas of the country. Delivery of CPAP supplies have seen, arguably, an increase in drop-shipments. Now that the bidding supplier must also offer oxygen and oxygen equipment in the same CBAs (requiring comparably more in-home service), I anticipate a decrease in the number of out-of-area contracts offered (with a resulting increase in reimbursement/single payment amounts). There are also about 17% less traditional HME supplier locations in the marketplace. You saw the previous summary via my FOIA report:
42 Update on CMS-1614-F As John Gallagher reviewed earlier today, the Affordable Care Act amended the Medicare Modernization Act statute to mandate use of information from the DMEPOS competitive bidding program to adjust the fee schedule amounts for DME in areas where competitive bidding programs are not implemented by no later than January 1, CMS estimates that by applying bid rates throughout the entire United States it would save over $7 billion over FY 2016 through This obviously affects the many non-metro regions of Big Sky!!
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44 National Pricing How? Adjust fee schedule amounts for states in different regions of the country based on previous competitive bidding round pricing in these regions. The regional prices would be limited by a national ceiling (110% of the average of regional prices) and floor (90% of the average of regional prices) There were three possible Regions (see next) Big Sky attendees here today service the Rocky Mountain BEA region.
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46 CMS determines a regional price for each state equal to the average of the single payment amount for an item or service from the CBAs that are fully or partially located in the same region where the state is located. CMS determines a national average price equal to the average of the regional prices.
47 Adjust fee schedules annually using CPI-U Revise the SPA each time there is a new round of bidding. BUT to be clear, the current RSPAs have already been determined using Round 2 (e.g., Boise) and Round 1 recompete (e.g., Miami) single payment amounts. And, CMS Joel Kaiser has suggested that if the Round 2 recompete SPAs are determined prior to the roll out, these prices will be used.
48 Although we believe that the costs of furnishing items and services in rural areas are different than the costs of furnishing items and services in urban areas, there is no evidence to support a statement that the difference in costs is significant. However, in order to proceed cautiously on this matter in the interest of ensuring access to covered DMEPOS items and services, we are proposing to phase in the price adjustments, as explained below, so that we can monitor the impact of the adjustments as they are gradually phased in. What this means: One half the reductions take effect January 1, 2016; the remainder on July 1, 2016.
49 While not released We have the current SPAs in all markets from the current programs. As CMS has provided us the methodology to determine the regional payment amounts (RSPAs), and has confirmed that the BEA regional array will be utilized, we can hence estimate the RSPAs for Big Sky states and the other regions now (*). (*) This assumes the R2RC prices are not determined in a timely manner; if they are, then the following estimates may not be accurate
50 Summary of Provisions As noted, the new adjusted pricing for DMEPOS CBP items will begin on January 1, This will be a phase-in process over 6 months, allowables will be reduced by 50% on 1/1/16 and 100% on 7/1/16. CMS finalized a pricing methodology for non-competitive bidding areas. A rural area will be defined as a postal zip code that has more than 50 percent of its geographic area outside of a metropolitan area (MSA) or a zip code that has a low population density area that was excluded from a competitive bidding area. The payment amount will be 110 percent of the average of the SPAs of all the areas where CBPs are implemented. Let s look at the states represented here today:
51 Big Sky has two states that have no competitive bidding areas (Montana and Wyoming) CMS dubs these states as frontier In this case the 2016 reimbursement (SPA) would NOT be the average regional amount (RSPA), but 110% of the national (eight region area) average. Only Idaho has a CBA (Boise)
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54 Counties in an orange metropolitan area but not included in any CBA (there is only bid area Boise) are paid at the RSPA. Big Sky states are in the Rocky Mountain region. Using the averages of the E1390 oxygen single payment amounts in the of all CBAs in this region, the reimbursement would be $ on January 1, 2016, and then $91.52 on July 1, 2016 for Idaho.
55 The yellow rural areas in Idaho, however, will be reimbursed at the adjusted fee schedule amounts based on 110 percent of the national average RSPA. As noted earlier, CMS has adopted an expanded definition of rural areas eligible for this provision. The array of ZIP codes defined as rural will be released sometime in late Thus, the RSPA in rural areas in Idaho (and all of Wyoming and Montana) for E1390 is $
56 Can we see (now) the likely RSPAs? Yes! AAH Regulatory Council has created a document which includes the high utilization codes. Go to:
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58 Summary
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61 This issue is especially troubling (Source:) Frequently Asked Questions on Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) 2015 Medicare Payment Final Rules (CMS-1614-F) Adjusting DMEPOS Payment Amounts Using Competitive Bidding Information 42 CFR (g) 2Q. When CMS uses competitive bidding information to adjust the DMEPOS fee schedule amounts in accordance with the methodologies established under this rule, would the bid limits for competitions under the competitive bidding program(s) that begin after the adjusted fee schedule amounts are implemented be based on the adjusted fee schedule amounts?
62 2A.Yes. This issue is discussed in the November 6, 2014, Federal Register at 79 FR The payment amounts that would be adjusted in accordance with sections 1834(a)(1)(F)(ii) and (iii) of the Act for DME, section 1834(h)(2)(H)(ii) of the Act for orthotics, and section 1842(s)(2)(B) of the Act for enteral nutrients, supplies, and equipment shall be used to limit bids submitted under future competitions and DMEPOS competitive bidding programs (CBPs) in accordance with regulations at (f).
63 Section 1847(b)(2)(A)(iii) of the Act prohibits the awarding of contracts under a CBP unless total payments made to contract suppliers in the competitive bidding area (CBA) are expected to be less than the payment amounts that would otherwise be made. In order to assure savings under a CBP, the fee schedule amount that would otherwise be paid is used to limit the amount a supplier may submit as their bid for furnishing the item in the CBA. The payment amounts that would be adjusted in accordance with sections 1834(a)(1)(F)(ii) and (iii) of the Act for DME, section 1834(h)(2)(H)(ii) of the Act for orthotics, and section 1842(s)(2)(B) of the Act for enteral nutrients, supplies, and equipment would be the payment amounts that would otherwise be made if payments for the items and services were not made through implementation of a CBP. Therefore, the adjusted fee schedule amounts would become the new bid limits.
64 In the same December 2014 FAQ document it indicated that, beginning in 2016, Medicare also intends to apply CB rates for standard wheelchair accessories to reduce payment amounts for complex rehab wheelchair accessories, which were specifically exempt by Congress from being included in the CB program. AAHomecare, VGM and many other stakeholders are currently reviewing and attempting to mitigate this application.
65 Additional areas of concern and potential confusion exist. For example, there are many HCPC codes that are unique to one bidding program, but not another. Some codes (in addition to the complex wheelchair accessories) are no longer bid. Some codes are currently bid, but will be discontinued in future rounds. Questions have arisen as to what amount the non-bid areas of the United States will be reimbursed for these items.
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67 Next: Bundling Also within CMS-1614-F, CMS is adopting with revisions its proposal to test a limited phase-in of bundled payments for certain types of DME subject to competitive bidding, under the auspices of the CMS Center for Medicare and Medicaid Innovation's demonstration authority. These areas will NOT include current competitive bid areas. They WILL include
68 This is a limited phase in (12 areas) of bundled monthly payment amounts for the equipment, supplies, accessories, maintenance and repairs for (then proposed) enteral nutrition, oxygen, standard wheelchairs, hospital beds, CPAP/RAD in place of capped rental policies. CMS will move forward with a bundling for power wheelchairs and CPAP in up to 12 markets. CMS did not move forward with bundling for: oxygen, standard manual wheelchairs, enteral nutrition, RADs, and hospital beds.
69 CMS will initially test this payment model in no more than 12 CBAs in conjunction with competitions that begin on or after January 1, 2015; any expansion of the program would follow program evaluation and future notice and comment rulemaking. Under this policy, the SPA for the monthly rental of DME will be based on bids for the monthly rental of DME and all item and service associated with the rental equipment, including all related supplies, accessories, maintenance, and servicing.
70 The SPA is based on bids submitted and accepted on a monthly basis for each month of medical need during the contract period. Separate payment for replacement of equipment, repair or maintenance and servicing of equipment, or for replacement of accessories and supplies necessary for the effective use of the equipment would not be allowed.
71 Could any Big Sky areas be in this test?
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73 Thank you! Mark Higley, Vice President Regulatory Affairs, VGM Group Inc. (888) office (319) cell
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