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CMS' Announcement of Capacity Policy and New Bidding Window Date Earns

Applause from Industry Leaders, Allows More Time to Educate Bidders

Defining the capacity policy brings long-overdue clarity to how bidders’ capacity affects the Single
Payment Amounts (SPAs). The 60-day bidding window will open on July 16, giving potential bidders
and suppliers of durable medical equipment (DME) more time to understand the major changes
coming to Round 2021 of the competitive bidding program.

Washington, DC, May 16, 2019 --( A group of leading industry trade organizations is
commending the Centers for Medicare & Medicaid Services (CMS) for releasing detailed guidance
describing how bidders' estimated capacity will drive the final Single Payment Amounts (SPAs) and for
announcing a new bidding window for Medicare's Round 2021 of the Durable Medical Equipment,
Prosthetics, Orthotics and Supplies (DMEPOS) competitive bidding program (CBP). The 60-day bidding
window, which will now open on July 16, gives potential bidders and suppliers additional time to
understand how the major changes coming to Round 2021 of the competitive bidding program will affect

“We commend CMS for ensuring stakeholders have additional time to familiarize themselves with the
new competitive bidding program reforms and how they will impact their business,” said Robert Rankin,
Executive Director of the Healthcare Nutrition Council. “It is important that every stakeholder be
prepared to bid responsibly in Round 2021, which is why leading industry experts have come together to
launch a nation-wide education campaign, complete with free information, webinars, and
easy-to-understand tools and calculators so providers can get up to speed quickly.”

To help potential bidders navigate the new competitive bidding program, a collaboration of five industry
leaders launched a comprehensive website offering useful information and easy-to-understand tools,
including interactive bid calculators for each of the 16 product categories available for bidding.

These tools are intended to help suppliers and prospective bidders understand the new “lead item pricing”
methodology, and how a bid for the lead item impacts the rest of the items in the product category and
how those SPAs would compare to current 2019 Medicare rates. These new SPAs will also essentially
become the rates in non-CBAs not defined as rural, while CMS will add only 10 percent to the SPAs to
set the rates in the non-CBAs designated as rural once the blended rate sunsets December 31, 2021.

“It's critically important that suppliers realize the broad impact that the rates set though Round 2021 will
have on almost every HME payer, both public and private,” said Tom Ryan, president & CEO of the
American Association for Homecare. “The results of Round 2021 will impact rates for rural and other
non-bid suppliers under Medicare, as well as for Medicaid, TRICARE, MCOs, and other payers who use
Medicare rates as a guide in setting their own fee schedules.”

CMS also recently released the final critical piece of the methodology used to establish the SPA. The new
guidance explains that CMS will used bidders estimated capacity (their historic capacity plus their
projected increase in the number of patients they say they can serve) along with the bid amount to rank

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bidders in the array.

“Prospective bidders also need a clear understanding of how the new lead pricing bidding methodology
works,” added Ryan. “In their 2018 Final Rule, CMS noted that suppliers 'may have to bid an amount that
is higher than the amount they would bid if they were bidding for the lead item alone in order to factor in
the cost of furnishing all of the other items in the product category.' Suppliers need to do their homework
and fully utilize the bidding calculators at to make sure they are ready to bid

“The newly released capacity policy also shows how influential a bidder's capacity is to setting the rate,”
said Mark Higley, Vice President of Regulatory Affairs of VGM Group, Inc. “While CMS does not
guarantee volume, bidders who overestimate their capacity could lead the SPA to be artificially low.”

CMS will evaluate bidders' estimated capacity to try to avoid over-estimation, but it is critically important
that bidders understand the pivotal role that capacity plays in setting the rates.

In addition to the website, the collaboration will be holding in-person and online workshops to help
potential bidders prepare for Round 2021. On May 20, the collaboration will host a one-hour Bid Smart
2019 webinar to educate DME suppliers about the upcoming major changes to the competitive bidding
program. The group will also host an in-depth one-day Bid Smart 2019 Summit in Nashville on June 5.

To view the website and bid calculator, visit

While the website provides useful tools to educate prospective bidders, it is not intended, nor should it be
construed to be legal advice. Bidders are responsible for their bids and should consult their own counsel
for legal advice or the CBIC.

The DME CBP Education coalition is sponsored by:

The Council for Quality Respiratory Care

The CQRC is a coalition of the nation's seven leading home oxygen therapy provider and manufacturing
companies with the mission to protect access to the home respiratory care benefits in the Medicare
program. Learn more at:

The American Association for Homecare

AAHomecare advocates for home medical equipment providers and manufacturers in Washington, D.C.,
as well as with state Medicaid authorities and other major payer groups. Their efforts include lobbying to
ensure sustainable reimbursement rates and sensible regulatory policy for the HME community at the
Federal and state level. Learn more at:

The Healthcare Nutrition Council

The Healthcare Nutrition Council is an organization representing the manufacturers of enteral nutrition
formulas, parenteral nutrition solutions, supplies and equipment. HNC is committed to improving health

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by advancing policies that address and raise awareness of nutrition and its impact on patient outcomes
and healthcare costs. Learn more at:

VGM & Associates

VGM & Associates is a member service organization committed to providing business solutions to
community-based DMEPOS providers throughout the U.S. For more than 30 years, VGM has provided
its members with access to products, services and support to enable them to do business better in an
everchanging business landscape. Learn more at

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Contact Information:

Ellen Almond
Contact via Email

Online Version of Press Release:

You can read the online version of this press release at:

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