The Proposed Rule The legislation provided suppliers in designated rural areas with a fee schedule that was a 50/50 blend of the rates before competitive bidding and of the then-applicable adjusted rates due to competitive bidding. CMS-1738-P states:
Note: A complete summary via the CMS Newsroom may be found here. In short, the Oct. 27 proposal is intended to establish payment methods for these items effective on or after April 1, 2021, or the end of the PHE, whichever is later. But let’s begin with the current environment, of which you are likely aware: As required by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, CMS had adjusted the fee schedule amounts for items and services furnished in rural and non-contiguous, non-competitive bidding areas based on a 50/50 blend of adjusted and unadjusted rates for the remainder of the COVID-19 public health emergency. CMS also provided higher payments for certain DME items and services furnished in non-rural, non-competitive bidding areas by a 75/25 blend, with dates of service on or after March 6, 2020, through the remainder of the COVID-19 public health emergency. As noted, the COVID-19 PHE resulted in legislative action that, among other things, was directed to allow DMEPOS suppliers with relatively better reimbursement from Medicare. HME Past, Present, and Future
Under the proposal, CMS would continue paying suppliers higher rates for furnishing items and services in rural and noncontiguous areas (this is Alaska and Hawaii except for Honolulu) as compared to items and services furnished in other areas, informed by stakeholder input indicating higher costs in these areas, greater travel distances and costs in certain non-CBAs compared to CBAs, the unique logistical challenges and costs of furnishing items to beneficiaries in the non-contiguous areas, significantly lower volume of items furnished in these areas versus CBAs, and concerns about financial incentives for suppliers in surrounding urban areas to continue including outlying rural areas in their service areas. Previous feedback from industry stakeholders expressed concern regarding beneficiary access to items and services furnished in rural and remote areas. …(W)e are proposing to continue paying the 50/50 blended rates in rural contiguous areas, but are proposing that the 50/50 blend will no longer be a transition rule under §414.210(g)(9), and will instead be the fee schedule adjustment methodology for items and services furnished in these areas under §414.210(g)(2) unless revised in future rulemaking. We are proposing that the fee schedule amounts for items and services furnished in rural contiguous areas on or after April 1, 2021, or the date immediately following | 14
