WASHINGTON — Ignoring pleas from scores of legislators, consumer organizations and HME associations representing thousands of home medical equipment providers, CMS refused Friday to rescind the interim final rule for DMEPOS competitive bidding.
The IFR, which requires a rebid of Round One in 2009, went into effect Saturday, April 18.
"Based upon its review and on the need to ensure that CMS is able to meet the statutory deadlines contained in [the Medicare Improvements for Patients and Providers Act of 2008], the administration has concluded that the effective date should not be further delayed," CMS said in a statement issued Friday afternoon. (See the full text in this issue.)
The decision to forge ahead in spite of numerous letters from federal lawmakers calling for the rule to be rescinded surprised some industry stakeholders. The latest, a bipartisan letter sent last week to HHS, CMS and the Obama administration, contained the signatures of 84 members of Congress.
"I really am disappointed. I thought that, at the minimum, they would delay the program," said Seth Johnson, vice president of government affairs for Pride Mobility Products, Exeter, Pa. "I am quite confident that the CMS statement is not going to be well received by the members of Congress [who called for the IFR to be rescinded]."
Tyler J. Wilson, president of the American Association for Homecare, also said CMS' decision was unexpected. "Given the problems highlighted in recent months and the congressional concerns, we are surprised by the decision to move forward," he said.
Since issuing the IFR Jan. 16, CMS has been inundated with individual and collective letters from members of Congress about the rule. Among serious problems, they said, the IFR does not adequately address the issues that compelled Congress to halt Round One of the bidding program two weeks after its implementation last July.
"They've made absolutely no changes from last year, and that doesn't sit well with people," said Cara Bachenheimer, senior vice president of Elyria, Ohio-based Invacare Corp.
Stakeholders had hoped CMS would stay implementation if only because there is no permanent leadership at the agency's helm. Bachenheimer noted that, if confirmed, Kansas Gov. Kathleen Sebelius, President Obama's nominee to head the Department of Health and Human Services, could yet come to the industry's aid. Sebelius said in testimony before the Senate Finance Committee she would review comments about the controversial Medicare bidding program.
"The administration extended the comment period for CMS' recent competitive bidding rule to ensure that all stakeholders have an opportunity to review CMS' proposed policies," Sebelius told the committee, adding that if she were confirmed, the comments would be "reviewed very carefully in order to implement the policies fairly."
"The significance [of Sebelius' comment] shows she has every intention of coming in and looking at the program," Bachenheimer said, adding that she expects Sebelius could be confirmed as early as Tuesday. "It's going to be our job to pressure them to look at this program and do what a lot of members of Congress are asking [to suspend the rule]."
Johnson, too, said he is optimistic Sebelius could make a positive difference. "I am hopeful that, based on what we have heard about Gov. Sebelius … she will do a comprehensive review and analysis about the problems that have been identified by both the provider community and articulated in the numerous [communications] from Congress and make some administrative changes prior to the restart of the program," he said.
Industry Fight Continues
Even with implementation of the IFR, Bachenheimer said, "I don't think this is the end." She said the industry has an opportunity to convince the new administration that, at the least, the IFR is fundamentally flawed and should be tabled. And there are numerous arguments for doing so, she said.
For example, Bachenheimer pointed out that the Obama administration has already floated the idea of competitive bidding for Medicare Advantage plans. While there aren't many details as to how that might be accomplished, there are two that could be helpful to the HME industry, she said.
"One is that any willing provider can participate," Bachenheimer explained, contrasting that with the DMEPOS bidding model that could eliminate as many as 90 percent of the providers in a bidding area.
Another detail in the industry's favor, Bachenheimer said, is looking at the way bids are calculated. For Medicare Advantage competitive bidding, the bids would be calculated based on the average of all submitted bids rather than on the complicated DMEPOS formula. "The 'any willing provider' is by far the more important of the two," Bachenheimer said, but both comparisons carry weight in an argument against the IFR.
Johnson agreed the any-willing-provider card could make a strong play in the current economy because the IFR would drive thousands of providers out of business. "The new Congress is saying that they want to do everything they can to protect small business," he said, "and on the other hand, the administration is going forward with these projects that … are counterintuitive to those overall goals."
In a letter to HHS Acting Secretary Charles E. Johnson last week, Rep. Glenn Thompson, R-Pa., echoed that contention. "In this time of economic uncertainty, the last thing government should be doing is creating regulations that will adversely affect small businesses and remove real competition from the marketplace," he wrote.
So What Now?
Even as CMS rolled out its statement, the industry was moving ahead.
"I think the next play for the industry … is to build on the significant support that we have been able to [muster]," said Johnson. "We need to continue to build support within Congress and continue to convey the message that competitive bidding must be stopped."
AAHomecare has convened a task force to discuss options and has hired a Washington health care consulting firm to develop several cost estimates for eliminating the bidding program.
There are several tracks the industry can follow, according to Michael Reinemer, AAHomecare's vice president, communications and policy. "One is to work with Congress and with the HME community to figure out whether we can eliminate the program. The sticking point there would be how much would it cost in a pay-as-you-go environment," he said.
"The second would be to work with the new appointees at HHS … to take a hard look at this rule and see what we can do in addressing the problems through that channel," Reinemer continued. "And on another track, the Program Advisory and Oversight Committee will reconvene, so there will be an opportunity there to … see if all the concerns are thoroughly addressed."
Last fall, CMS unexpectedly ended the term of the first PAOC, set up to advise the agency on the implementation of competitive bidding, then formed a new PAOC in January.
John Gallagher, vice president of government relations for Waterloo, Iowa-based VGM Group, said it was critical that providers continue to communicate the delay-the-IFR message to members of Congress. "The main thing is to make sure they are involved with Congress," he said, noting that if the IFR is not rescinded by CMS, it will literally take an act of Congress to halt it.
VGM has requested that Rep. Bruce Braley, D-Iowa, who supports a delay in competitive bidding, work with House Energy and Commerce Health Subcommittee Chair Rep. Frank Pallone, D-N.J., to include language delaying bidding in his markup for the health care reform package. (Congressional committees use the markup process for debating, amending or rewriting proposed legislation.)
Braley's office said the congressman would discuss working with Pallone on his return from the Easter recess and added that he has already been in contact with Rep. Heath Shuler, D-N.C., regarding possible legislation.
Shuler, chair of the House Small Business Subcommittee on Rural Development, Entrepreneurship and Trade, held a hearing in February to discuss the effects of competitive bidding and has called for its elimination altogether. Following the hearing, Rep. Blaine Luetkemeyer, R-Mo., said the subcommittee would draft a letter to Small Business Committee Chairwoman Nydia Velazquez, D-N.Y., and possibly recommend legislation.
One More Time for Round One Providers
Meanwhile, CMS said further guidance would be issued in the coming weeks on the new Round One timeline and bidding requirements.
Rob Brant of Miami-based City Medical Services and president of the Accredited Medical Equipment Providers of America, whose members went to court over bid disqualification in Round One, said he is ready.
"I am fully prepared for Medicare to begin rolling out timetables for the rebid while they explain that they are doing their jobs as mandated by Congress," he said. "At that point, the industry will have to pull together again and request help for legislators to repeal the program based on the recent cuts in reimbursement, combined with increased quality standards with mandatory accreditation and surety bonds."
So, déjà vu all over again?
Reinemer isn't so sure.
"I think because there are new faces, a new administration and a new Congress, there are fresh ears," he said. "This is a new ball game to a certain extent.
"Part of our job," he added, "is to remind people that … we're part of the continuum of care that takes care of seniors and those with disabilities and keeps them out of the hospital. We're part of the solution for Medicare. And that's the message we have to relentlessly remind people about."