With only weeks left until the bid window closes on the Round 1
rebid (Dec. 21), a bipartisan bill that would eliminate DMEPOS
competitive bidding is gaining traction among legislators. At press
time, H.R. 3790, introduced Oct. 13 by Rep. Kendrick Meek, D-Fla.,
had garnered 64 cosponsors — up from its original 16 —
thanks to the efforts of many in the home medical equipment
industry.
“We expect more congressional support as members fully
understand the tremendous cost savings of our budget-neutral
legislation,” said Barry Johnson, president of the Texas
Alliance for Home Care Services and one of the bill's
originators.
With the Meek bill, providers are finally armed to fight the
battle against competitive bidding, said Johnson, who stressed that
more providers are needed on the front lines. “We need more
providers to step up to the plate and tell the story,” he
said. “It's an education process.”
He knows it's tough for providers who have never been
politically active before. Johnson said when he visits a
legislator's office, “I say, ‘I'm not here to bother
you; I'm here to tell you something that is going to make
everyone's life better.’”
A respiratory therapist for 40 years, Johnson is a salesman when
it comes to the Meek bill because he believes it gives CMS just
what it wants and protects patients and providers at the same time.
“The point of competitive bidding was to reduce the number of
providers out there. Competition reduction. Well, OK,” said
Johnson. “Reduce fraud and abuse — absolutely. Get more
for your money. I'm a taxpayer and I'm all for that.
“But what if I could do all that stuff better, faster,
quicker and give you back $25 million? Would you go for that? Well,
welcome to H.R. 3790.”
Johnson ticked off the bill's selling points:
- Significant savings
"First off, we have a bill with a number on it. It's pretty
tough to see the light when no one turns the light bulb on,"
Johnson said. Up to this point, industry representatives could only
provide legislators with information and particulars about the
devastating problems competitive bidding would create for small
business providers and Medicare beneficiaries, he said.
"But how can they really properly evaluate what you are telling
them? Now they have the legislation and they can see the
legislation," Johnson said. "We have had it scored by an
independent actuary, and it's coming in about 10 percent [savings
for Medicare]. We've had a 9.5 percent cut already. That's 19.5
percent, a half percent greater than the [savings from the] first
round of demonstrations in Polk County, Fla." Combined with the 25
percent savings on oxygen from the 36-month oxygen cap implemented
in January, Medicare is already seeing a substantial savings that
is far beyond the average 26 percent savings on DMEPOS items in the
aborted Round 1 of competitive bidding last year.
"We're rolling back the prices to 1998. We're better than
Walmart," Johnson said.
The Meek bill would preserve patients' access to care because it
would not eliminate thousands of providers, Johnson pointed out.
"When you're reducing the number of providers by 90 percent, you
are asking 10 percent of the providers to take care of 100 percent
of the population. That's a tough deal," he said.
His own Dallas County is 9,000 square miles and, under
competitive bidding, would have only about 40 providers, he
estimates. "It's going to be difficult to get from one corner to
another in a timely manner … Now we have a patient risk issue
here because we are limiting access to care."
Medicare is very likely to see more trips to the emergency room
and more hospitalizations because there will be too few providers
to attend to patients quickly, a problem that would worsen
dramatically in cases of thunderstorms, hurricanes, snow and heavy
winds, Johnson said.
- Elimination of the Competitive Bidding Implementation
Contractor
"The CBIC can go away, and the cost of the CBIC is $25 million
annually," Johnson said. "We truly have a bipartisan bill which
will achieve the same results as competitive bidding while
returning $25 million to the taxpayer annually. These
administrative funds are simply being wasted to administer the
severely flawed competitive bidding program."
"We want to start a fraud-and-abuse program that works with the
$25 million," Johnson said. Because of mandatory accreditation,
surety bonds, onsite visits, stiffer standards and post-payment
audits, inroads are already being made into the fraud-and-abuse
arena, he said.
“There was a reduction of providers, on average, of about
40 percent,” he said. “We think what has happened is
that those people who were less than responsible, those people have
dropped out.
“Congress is seeing that,” he continued, noting that
despite the derogatory stories popping up all over the media
— the most recent a “60 Minutes” piece on Oct. 25
— legislators are beginning to understand that most of the
fraud that is surfacing is being perpetrated by “Nigerian
scam artists and the Russian mob, not the majority of the
independent mom-and-pop, dedicated providers” serving local
areas.
“This is good news for our industry,” he said.
“They know it's not us.”
Johnson is hopeful that other organizations will get on board to
help champion H.R. 3790 with legislators. The 5,000-member National
Association for Support of Long Term Care already has thrown its
support behind the bill. The group is encouraging a grassroots
effort and is sending an advocacy message to legislators.
Such support could help to make H.R. 3790 a standalone bill
rather than one that would need to piggyback on another measure
such as health reform legislation. “I personally would like
to see it as an independent-status bill,” Johnson said.
“There are too many problems associated with the health
reform package.”
He's proud of the Meek bill, which he noted was forged over
seven months with important input from industry stakeholders and
help from the American Association for Homecare. There's much good
in it, he believes. But in the end, the biggest reason to eliminate
the DME bid program is “to save the beneficiary”
because competitive bidding is unsafe for patients, Johnson
said.
“Rather than go through this gyration with competitive
bidding and all the problems associated with it, let's just go with
3790 and make everybody happy,” he said. “It's a way to
save for the Medicare program. This is a bipartisan bill that does
something for everybody.
“We've kept access, lowered the patients' copay by
reducing the fee schedules and, Grandma, we are not throwing you
out with the bathwater … We do all that independently, with
one swoop of the pen and without asking for any assistance from any
government agency and no new taxes for any taxpayer.”
Johnson has a personal interest in all this that goes beyond his
business. His father is 86 and needs oxygen. He does not want to
see what happens to his dad if competitive bidding goes through.
Elimination of the program is “just something that has to
happen,” he said. “We owe this to the American
taxpayer, we certainly owe it to the beneficiary and we owe it to
Congress to come up with a bill where we can continue to provide
the services, protect the elderly and prevent fraud.
"If they can pass this bill, they will definitely be a Medicare
beneficiary's hero."
Don't Let Bid Program Restart
In a letter last month to members of Congress asking for support
of H.R. 3790, lead sponsor Rep. Kendrick Meek, D-Fla, wrote:
"The Medicare competitive bid program for durable medical
equipment and services (Title XVIII of the Social Security Act)
began in July 2008 as a well-intentioned effort to improve quality
of service and eliminate excess costs in Medicare. However there
was nothing competitive about the misconceived program.
"There are serious flaws in the bidding process which produced
few competitors, fewer home care services and a decrease in the
quality health care [for] those with disabilities who require the
right care and equipment in order to live.
"Congress delayed the program only two weeks after it began, in
a clear acknowledgement that the bidding process was deeply flawed
and needed fixing. For example, contracts were awarded to suppliers
without a physical location in or near the bid area and who were
unable to provide the equipment or services to patients; unlicensed
providers (in violation of state standards); and fly-by-night
operations with no experience in providing bid items.
"However, in the 14 months since the competitive bidding program
has been delayed, no significant improvements have been made to the
process. In October 2009, the program is due to begin again. We
cannot allow it to restart."
To contact your representative in support of H.R. 3790,
call the U.S. Capitol switchboard at 202/224-3121. The operator
will connect you directly to your congressman's office using your
ZIP code.
How It Works
To gain support from a Congress dealing with budget deficits and
health care changes, H.R. 3790 is budget-neutral, calling for minor
cuts in all DME (except Group 3 complex rehab) of 0.25 percent for
three years and a single 0.5 percent cut two years later combined
with a CPI-U freeze.
According to a summary from AAHomecare, here's how H.R. 3790
would offset the cost of eliminating the competitive bidding
program:
In 2010, 2011 and 2012, the bill eliminates the annual payment
update (CPI-U) for all HME items and reduces payment rates for all
items by 0.25 percent in each year.
In 2014, the bill eliminates the additional 2 percent increase
in payment rates. All items would still receive the annual CPI-U
update.
In 2015, the bill eliminates the annual CPI-U update for all HME
items and reduces payment rates for all items by 0.5 percent.
Complex rehab power wheelchairs (Group 3 and above) would not be
subject to any of the reductions.
For the full text of H.R. 3790 along with background and
talking points, check the AAHomecare Web site at www.aahomecare.org.
We're All in Round 1
"This affects every provider. Our focus now has to be as
providers getting our representatives signed on [to H.R. 3790]
… The bill is a good one, the pay-for is fair and the
industry as a whole will stay intact. I hope we can get traction,
because competitive bidding is not the answer to health care."
— Georgie Blackburn, vice president of
government affairs, Blackburn's, Tarentum, Pa.
"The term 'competitive bidding' really means 'restrictive
contracting' and essentially destroys about 90 percent of small
businesses, removes healthy competition, limits patient choice and
limits patient access to care. At the end of the day, that strategy
will prove more costly than the alleged savings of the bid
program."
— Beth Bowen, executive director, North
Carolina Association of Medical Equipment Services
"The Senate Finance Committee [reform bill] is expanding Round 2
to 100 metropolitan statistical areas and fast-tracking the date
for applying competitive bidding results to the rest of the nation.
Everyone should be concerned about this."
— John Shirvinsky, executive director,
Pennsylvania Association of Medical Equipment Suppliers
"The perceived benefits of a bidding program will never
materialize. Any program that produces fewer competitors, fewer
home care services and lowest-common-denominator health care for
older Americans and people with disabilities is wrong. Every
provider must make a stand."
— Tyler Wilson, president and CEO,
American Association for Homecare
"We believe [this bill] has brought consensus within the
industry for the best of the independents, nationals and
beneficiaries as a whole … As H.R. 3790 continues to gain
support, providers are reminded and urged to continue calling their
representatives to ask that they cosponsor this budget-neutral
bill. Time is of the essence!"
— John Gallagher, vice president of
government relations, VGM
"I've been in business for 26 years, built up a loyal clientele,
gotten good at my craft. Now all that's in jeopardy due to
misguided government bureaucracy."
— Bill Griffin, president and CEO,
Griffin Home Health Care, Charlotte, N.C.
"Medicare is looking to drop all reimbursements to first-round
competitive bidding prices immediately, insurance companies will
match Medicare's rates, Medicaid programs will follow, etc. The
disgusting reality is that those initial bids will, again, not be
based on reality of providing quality service … Our industry
will be destroyed. Winners will be losers along with everyone else;
there can be no winners with a competitive bidding program so
flawed and pooly executed."
— Roger Ribas, president, Florida
Alliance of Home Care Services
"Everything is impacting the patient. The unfortunate thing is
that in [CMS'] zeal to curb fraud and abuse and to limit suppliers,
they are harming the people who need the services."
— Wayne Stanfield, president and
CEO, National Association of Independent Medical Equipment
Suppliers
Déjà VU All Over Again
A number of serious problems with the competitive bidding
program surfaced in its initial rollout, which was halted by
Congress after a two-week implementation in July 2008. Summarized
here by AAHomecare, HME stakeholders fear many of the same problems
will occur again in the repeat implementation of Round 1,
including:
- Disruption to patient services
Patients were forced to go to multiple, unfamiliar providers for
different items and services. Informal surveys showed that some
winning providers were unable to provide care to beneficiaries.
stays
Confusion about the restricted list of contracted HME providers
delayed hospital discharges and triggered unnecessary emergency
room visits.
Providers with no history of servicing a geographic area or no
operations in a bidding area were awarded contracts.
Companies were awarded Medicare contracts to provide equipment
and services for which they were not licensed and had no previous
experience providing.
Structural flaws in the bidding program caused providers to
submit artificially low bids because they were faced with the
threat of losing their businesses if not awarded a contract.
Winning contracts also were viewed as commodities that could be
sold once a bid was won.
"I don't expect anything different," said provider Rob Brant of
City Medical Services in North Miami Beach, Fla., about the Round 1
rebid. "It's déjà vu all over again. Medicare is basically doing
the same thing, saying the same thing, using the same methodology
as before. There is no judicial review, no transparency."
The Round 1 Rebid
Competitive Bidding Areas
- Cincinnati-Middletown (Ohio, Kentucky and Indiana)
- Cleveland-Elyria-Mentor (Ohio)
- Charlotte-Gastonia-Concord (North Carolina and South
Carolina) - Dallas-Fort Worth?Arlington (Texas)
- Kansas City (Missouri and Kansas)
- Miami-Fort Lauderdale-Miami Beach (Florida)
- Orlando (Florida)
- Pittsburgh (Pennsylvania)
- Riverside-San Bernardino-Ontario (California)
Products
- Oxygen supplies and equipment
- Standard power wheelchairs, scooters, and related
accessories - Complex rehabilitative power wheelchairs and related
accessories (Group 2) - Mail-order replacement diabetic supplies
- Enteral nutrients, equipment and supplies
- CPAP, RADs, and related supplies and accessories
- Hospital beds and related accessories
- Walkers and related accessories
- Support surfaces (Group 2 mattresses and overlays) in
Miami
Timeline
- 12/21/09 - 60-day bid window closes
- June 2010 - CMS announces single payment amounts, begins
contracting process - September 2010 - CMS announces contract suppliers, begins
contract supplier education campaign - Early Fall 2010 - CMS begins supplier, referral agent and
beneficiary education campaign - 1/1/2011 - Implementation of Medicare DMEPOS competitive
bidding program Round 1 rebid contracts and prices
For additional information on the Round 1 rebid, including
program information and fact sheets, FAQs, bidding charts and other
educational materials, see the CBIC Web site at
href="http://www.dmecompetitivebid.com">www.dmecompetitivebid.com.
