Healthcare Business News

CMS to overhaul durable medical equipment bidding, reimbursement

By Virgil Dickson
Posted: February 24, 2014 - 6:45 pm ET

The CMS is looking to overhaul the bidding and reimbursement process for durable medical equipment.

The federal agency is seeking public comment on the methodology (PDF) it would use to adjust payment amounts. It also wants ideas for potentially simplifying the payment rules while at the same time enhancing beneficiary access to items and services.

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Traditionally, Medicare pays for durable medical equipment using a fee schedule that is based on what suppliers charged for the items and services during the 1980s and increased by annual update factors. However, this method has led to steadily rising prices. In fiscal year 2011, the latest year for which prices are available, benefit payments for durable medical equipment were $8.5 billion.

The Patient Protection and Affordable Care Act mandated an adjustment to the fees being paid for durable medical equipment beginning Jan. 1, 2016.

Specific questions the federal agency wants feedback on include whether the cost of items should vary based on the size of the market served. Another is whether it should consider simplifying payment rules by making one monthly payment to the supplier for all related items and services needed each month versus the product by product model in place now. The deadline to submit comments is March 28.

Bundling payments for all items and services into one monthly payment would greatly simplify the reimbursement program for durable equipment, improve beneficiary access to quality items and services, and contribute to greater savings, according to the CMS.

Follow Virgil Dickson on Twitter: @MHvdickson

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