In the final rule, it was announced that CMS will test a bundled, continuous payment model for CPAP Devices and Standard Manual Wheelchairs. Before any bid program can begin, CMS must establish a maximum bid limit that suppliers cannot bid above. This is typically set at the current fee schedule for a product in a given Competitive Bid Area (CBA). For Standard Manual Wheelchairs, CMS established that the bid limit will be based on the total payment amounts per month in the selected CBA for the base equipment, repair, maintenance, service and accessories used, divided by the total (unduplicated) number of beneficiaries receiving those items and services. For CPAP, however, there is precedent as CMS has paid CPAP on a continuous bundled payment methodology in the past...
Our starting point on the fee schedule is the national ceiling for CPAPs back when they were in the frequent and substantially serviced category and paid as a continuous rental with all accessories, labor and maintenance included in the reimbursement rate. The ceiling back in 1993 was listed at $122.25. With all the adjustments for increases and decreases for all years in between 1993 and 2015, we end up with a current ceiling of $137.08. However, individual state fee schedules vary, and if a beneficiary lived in NY, the fee schedule in 2015 would be $116.73. CMS could choose to set the national ceiling as the max bid rate, or use individual state fee schedules. Opting to use the individual state fee schedule would lower the max bid amount (meaning, to secure a contract, supplier would have to bid below the established maximum). Therefore, at the national rate supplier would bid a max rate below $137.08, but if state fees are used, NY bidders would not bid any higher than $116.73. The bid amount must cover the provision of the base equipment, all accessories, supplies, repairs, maintenance and service on a monthly basis for as long as medically necessary.
We put together a hypothetical reimbursement scenario for an E0601 with a nasal mask provided in a non-CBA in New York. In this scenario the supplier is replacing supplies at the frequency outlined in the PAP LCD. This scenario assumes the supplier is reimbursed for the setup of the PAP, accessories and supplies and continues to replenish supplies until the 5 year RUL. On average, in this scenario, the supplier would be reimbursed a total of $6,171.87 over a five year period. This breaks down to $102.86 a month. Keep in mind that this does not include any repairs or replacement parts. If we were to contract at the maximum allowable for the bundled payment program at $137.08, over the same five year period the supplier would be reimbursed a total of $8,224.80. That breaks down to a $34.94 increase in total monthly reimbursement.
The above is a hypothetical breakdown designed to get you thinking about how this ruling will impact you as a supplier. While we do not yet have the designated demo areas, CMS has indicated that there will be no more than 12 CBAs in total for the new demonstrations. We have been told they will not overlap. There are three demos in all: the standard manual wheelchair bundled payment demo, CPAP bundled payment demo and the modified repair requirements for standard power wheelchairs paid on a capped rental basis. These demonstrations typically last 2-3 years before expanding.
Keep in mind that all pricing is subject to change in 2016 as CMS rolls out National Competitive Bidding pricing to all areas rural and the like.
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