CMS Announces New Phase of Controversial Competitive Bidding Program, OTS Orthotics Left Off

The Centers for Medicare and Medicaid Services (CMS) announced earlier this week that they will seek to hold a recompete of the bidding that set single payment amounts for Round 2 of Medicare’s Competitive Bidding program. Round 2 of the competitive bidding program went into effect in July of 2013 and forced an average 45% reduction in single payment amounts for competitively bid products. New payment amounts for the 100 Metropolitan Statistical Areas included in Round 2 will be calculated based on the “recompete” of the bidding process.

CMS has also announced their intention to apply the new average single payment amounts nationwide prior to the January 2016 mandate.

Of particular interest to orthotic and prosthetic providers are “Off the Shelf” orthotics. Since the inception of the competitive bidding program, CMS has had the authority to include off the shelf orthotics into their competitive bidding program. To date, they have chosen not to do so, however many analysts believe OTS orthotics will be included when the pricing for competitively bid areas is applied nationally in 2016.

As a point of reference, remember that Medicare’s competitive bidding program includes 8 standard product categories in durable medical equipment and also a national bid program for diabetic supplies. Only those that bid and are awarded contracts in bid areas are allowed to service Medicare patients, creating a significant loss of access to medical equipment in large metropolitan areas. Anywhere from 80-95% of the current suppliers of bid products in bid areas will not be allowed to service/bill Medicare if they reside in a competitively bid area.

Insulin pumps were the only major product to be added in Round 1 recompete, but not included in Round 2 recompete. The product categories included in the Round 2 recompete are:

  • Enteral Nutrients, Equipment and Supplies
  • 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
  • Nebulizers and Related Supplies
  • Negative Pressure Wound Therapy (NPWT) Pumps and Related Supplies and Accessories
  • 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
  • Standard Mobility Equipment and Related Accessories
    • includes walkers, standard power and manual wheelchairs, scooters, and related accessories
  • Transcutaneous Electrical Nerve Stimulation (TENS) Devices and Supplies

OPGA will continue to monitor Medicare’s competitive bidding program and fight efforts by CMS to add OTS orthotics to the competitive bidding program. However, with CMS having the statutory authority to include OTS in future phases, the real battle is over which L codes are considered to be “off the shelf” vs which are considered to be “custom”. Custom O&P will require a new act of congress to alter the law.

For more information on the Round 2 recompete, click here.

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