HARRISBURG, Pa. — John Shirvinsky thinks something stinks
about the Round 1 competitive bidding rates for
oxygen.
"We've got a big problem with these [rates]," said the executive
director of the Pennsylvania Association of Medical Suppliers about
the reimbursement rates announced July 1. "There is seriously
something wrong with these numbers."
The rates resulting from CMS' rebid of Round 1 averaged 31
percent less than the current Medicare allowable for oxygen
supplies and equipment. Of average single-payment amounts for an
oxygen concentrator (E1390) in the nine Round 1 competitive bidding
areas, Pittsburgh's payment came in the lowest at $102.84, or a 37
percent reduction.
That caused Shirvinsky so much concern that he has been polling
PAMS members individually to find out if they bid and, if so, what
their bid was.
His findings have been worrisome, he said.
"What we are looking at now is a median bid — and the
numbers will change as we get more bid rates — of $132 versus
the $102 that CMS put out," Shirvinsky said. "I am not seeing bids
that really came anywhere near what CMS is reporting."
While the majority of bidders aren't members of PAMS, he said,
its members service the majority of patients that are covered in
the Pittsburgh area.
"I am getting the sense that the responsible companies,
long-standing, good providers, have submitted steep cuts and
responsible bids, but nothing approaching the number that CMS threw
out there as the median bid."
It makes him wonder, he said, who made those lowball bids. Other
providers using desperate measures to try and save their
businesses? Outside companies with no knowledge of the oxygen
service components? Or did CMS make an error in calculation, or
worse?
"It's disturbing as to what might be going on," Shirvinsky said.
"There is no reason to trust these bid numbers. They are
unsustainable. I don't trust them and I don't see why CMS trusts
them."
He is troubled, he said, that CMS, against the industry's pleas,
shortened the requirement for financial data required of bidders
from three years to one. And he questions whether CMS analyzed the
financial data it did receive. How can analysts reasonably believe
that companies operating on such low net margins could suffer a 37
percent cut in a key category and stay in business, he asks?
Shirvinsky pointed out that the 9.5 percent Medicare cut that
providers took to pay for the delay of the aborted Round 1 in 2008,
added to the 36-month oxygen rental cap implemented in 2009, has
already resulted in a 27 percent oxygen reimbursement cut for
Pittsburgh.
"Having dealt with that cut … we came in and said take
another 37 percent away? Where does that make any sense?"
Shirvinsky asked, adding that in his view, the new rates are the
result of either fraud or an error. It's impossible to determine
whether the rates are in error, though, because "I don't know what
the numbers are, I don't know how they were calculated, " said
Shirvinsky.
"This has not been a transparent process," he said, noting that
CMS has "refused congressional requests, Freedom of Information
requests, public requests" to be transparent.
"Typically, when there is a bid opening, everybody knows
everybody's bid," he continued. "CMS has done this under the cloak
of darkness … These numbers won't stand; they are not
defensible.
"The fact that this process is so secretive should raise red
flags everywhere."
Shirvinsky said he is further concerned that legitimate
providers in the industry will be unable to get any form of
credit.
"If you go to a bank to get a line of credit based on these
figures, you are going to be turned down," he said. "Two years ago,
an upstanding, solid company was turned down for a line of credit.
They were told there were red flags all over the industry and [the
lender] feared a takeover."
That doesn't seem so far-fetched now to Shirvinsky.
"The more I think of it, this could be an attempt by the federal
government to take over the entire industry," he said. "They are
setting this industry up for failure, this program up for failure
and what's worse, they are setting Medicare beneficiaries, some of
whom are on life-supporting equipment, up for a terrible
failure."
Shirvinsky said an injunction to stop competitive bidding was
"not out of the question."
"It may need to come out of this," he said. "We need to take
this seriously. We've got to be able to turn this around and use
this as motivation. We don't deserve this fate. The work our
industry does is good work, it is honorable work and it is the most
cost-effective work that anyone in health care does.
"This industry needs to be motivated and needs to step up" to
stop the bidding program, he said. "Whatever we've been doing over
the last couple of years, it needs to be amplified and stepped up
more than ever."
View a chart of the
single-payment amounts for oxygen supplies and equipment in the
nine Round 1 CBAs on CBIC's website.
View more competitive bidding
stories.
