CPAP Takes 47% Medicare Reimbursement Cut

DME providers in 91 major metropolitan areas received unwelcome news this week in the form of a 47% Medicare reimbursement cut to the CPAP single payment amount (SPA). The cut comes courtesy of competitive bidding, a nationwide program mandated by the Medicare Modernization Act of 2007, and administered by CMS.

A full-face mask used with PAP device will now garner a $99 SPA. Click here for the full list of SPAs affecting sleep-related equipment. Click here for the official CMS press release/announcement.

While providers reportedly began receiving competitive bidding contract offers from CMS as early as yesterday (1/31), a full list of contracted suppliers will not be released until spring 2013. New SPAs for CPAP and related accessories will officially go into effect by spring 2013.

By law, CMS can extend competitive bidding rates nationwide, and many advocates expect that to happen. Self dispensing sleep labs, and/or physicians who sell CPAP equipment, are also subject to competitive bidding and its new rate structure.

Home care providers throughout the country swiftly criticized the round two rates. “The sky really is falling,” said Michael Hamilon, executive director, Alabama Durable Medical Equipment Association. “Those rates are unsustainable, and most of the equipment can only be provided by buying the cheapest piece of junk on the market and offering really poor service.”

“The existing program is not fair to the millions of patients who depend on these services for life itself,” added Joel D. Marx, chairman of AAHomecare, and a DME provider in Cleveland. “They will lose access and quality. They will suffer unfairly due to the tragic misguided implementation of a deeply flawed program.”

DME providers continue to fight competitive bidding in hopes of replacing it with an industry-favored market pricing program (MPP). Advocates at the American Association for Homecare plan to push the replacement measure as part of a debt ceiling package that Congress will discuss in May.

On the same day as CMS released the new SPAs, the American Academy of Sleep Medicine publicized a new “spring course” that offered clinical and practical guidelines for providing DME. The course is aimed at physicians and support staff. “As long as they need to go through the same competitive bidding program as the HME industry is currently going through,” said Helen Kent, RRT, CEO of Progressive Medial, Carlsbad, Calif, “I say go for it.”

As for the new competitive bidding rates, Kent shares the frustration of many providers. “With a cut of 47% to CPAP/Bi-Level, I can’t even afford to grandfather in the Medicare patients that I am currently servicing,” she said. “Looks like CMS will be able to get rid of lots of mom and pops in this industry. Who is next?”

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