Press release

CMS Finalizes Policies to Modernize and Drive Innovation in Durable Medical Equipment (DME) and End-Stage Renal Disease (ESRD) Programs

CMS Finalizes Policies to Modernize and Drive Innovation in Durable Medical Equipment (DME) and End-Stage Renal Disease (ESRD) Programs
Administrator Verma: “Today’s rule finalizes market-oriented reforms by simplifying the bidding process to increase patient access to Durable Medical Equipment items and services and incentivizes the development and use of transformative and innovative dialysis therapies.”

Today, the Centers for Medicare & Medicaid Services (CMS) finalized innovative changes to the Medicare payment rules for Durable Medical Equipment Prosthetics, Orthotics, and Supplies (DMEPOS) and the End-Stage Renal Disease (ESRD) programs. The policies aim to increase access to items and services for patients, drive competition and increase affordability.

“The rule finalized today makes innovative changes to the Medicare payment rules for the durable medical equipment and end-stage renal disease programs.  It also helps to ensure continued access to durable medical equipment and makes significant improvements to our competitive bidding system.” said CMS Administrator Seema Verma. “Based on many comments we received on our DME proposal from suppliers, manufacturers and their associations -- all of whom supported our proposals -- we are implementing market-oriented reforms to Medicare’s DMEPOS Competitive Bidding Program that also reduce burden on suppliers by simplifying the bidding process.”

Improved Access to Durable Medical Equipment

Today’s rule finalizes market-oriented reforms to the Medicare’s DMEPOS Competitive Bidding Program (CBP).  The final rule will increase beneficiary access to items and services, leverage opportunities to increase the program’s effectiveness and better ensure the long-term sustainability of the DMEPOS CBP by streamlining the program and strengthening the bidding rules. Changes to the DMEPOS CBP that we finalized today also will reduce burden on suppliers by simplifying the bidding process. This rule establishes lead item bidding, which means suppliers will only need to submit one bid per product category. In addition, the single payment amounts for items in each product category under the DMEPOS CBP would apply to the lead item in the product category. These changes streamline the program, enhance quality and access to innovative products and help ensure the long term sustainability of the program and the savings it generates. Also, the rule finalizes increases in DMEPOS fee schedule rates, using a blend of adjusted and unadjusted fee amounts, in order to protect access to needed durable medical equipment in rural areas that are not subject to the DMEPOS CBP.

The process for recompeting contracts with suppliers currently in effect under the DMEPOS CBP has not yet been initiated and the current contracts for the DMEPOS CBP will expire on December 31, 2018.  As a result, starting January 1, 2019, and until new contracts are awarded under the DMEPOS CBP, there will be a temporary gap period in the entire DMEPOS CBP and National Mail Order CBP that CMS expects will last two years until December 31, 2020. During that time, Medicare beneficiaries will continue to receive DMEPOS items from any Medicare-enrolled DMEPOS supplier and in most cases, they won’t need to switch suppliers. For more information, please visit https://www.cms.gov/Outreach-and-Education/Outreach/Partnerships/Downloads/DMEPOS-Temporary-Gap-Period-Fact-Sheet.pdf.

As required by the 21st Century Cures Act, this rule also finalizes Medicare fee schedule payments for DME furnished on or after January 1, 2019 in areas of the country where competitive bidding is not in effect. 

CMS is also soliciting comments on new product categories to be phased-in for the next round of the DMEPOS Competitive Bidding Program.  Please visit CMS.gov for more information.

End Stage Renal Disease Prospective Payment System

CMS is also taking steps today to support innovation in Medicare’s ESRD Prospective Payment System (PPS) by expanding the Transitional Drug Add-on Payment Adjustment (TDAPA) for new ESRD drugs and biologicals, effective January 1, 2020. As the largest payer for kidney care, expanding TDAPA to all new renal dialysis drugs and biological products will help incentivize the development and use of transformative and innovative therapies.

Finally, this final rule takes significant steps forward by strengthening quality incentives, improving patient outcomes and reducing administrative burden. These changes advance CMS’ Patients Over Paperwork initiative and will allow doctors to spend less time on paperwork and more time with their patients. Based on stakeholder feedback, CMS reduced ESRD facility-related documentation burdens for the comorbidity payment adjustment so that the documentation requirements are more consistent with other payment systems. CMS also reduced the reporting burden for the ESRD Quality Incentive Program (QIP) by finalizing a more limited measure set that better aligns with the CMS Meaningful Measures Initiative. 

For a fact sheet on the CY 2019 final rule (CMS-1691-F), please visit: https://www.cms.gov/newsroom/fact-sheets/cy19-esrddme-nprm-cms-1691-f-and-dmepos-competitive-bidding-program-temporary-gap-period

To view the final rule, please visit: https://s3.amazonaws.com/public-inspection.federalregister.gov/2018-24238.pdf

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