Providers work against the Washington clock on support for H.R. 3790.
by Gail Walker (gwalker@homecaremag.com)

Leaders at the American Association for Homecare's Washington
Legislative Conference March 1-3 told attendees that getting the
industry's message out on competitive bidding was up to
them.

"You have a real opportunity over the next couple of days to
make a difference," said AAHomecare President Tyler Wilson,
pointing out that health care is at a crossroads.

"There really are fundamental issues being discussed and
profound philosophical differences being voiced. It's also fair to
say there are bare-knuckle politics being played up and down
Pennsylvania Avenue. So almost everything related to health care is
in play, and that means that nearly everything is up for
debate.

"And that," Wilson continued, "is the good news and perhaps the
bad news for the home care community."

The association sent a two-page summary sheet to Capitol Hill
offices outlining HME's issues — ahead of 300 lobbying visits
scheduled during the week with federal lawmakers and their staffs
— chief among them support for H.R. 3790 to repeal the
bidding program.

But according to AAHomecare's Walt Gorski, vice president of
government affairs, "An issue paper does not sell support of H.R.
3790 … That's your job."

And a Big Job It Is

The bill is gaining traction; at press time, providers' lobbying
efforts were expected to bump the number of cosponsors
substantially. But with health care reform in play, Wilson said,
"every day that goes by" makes the push for H.R. 3790 more
critical.

CMS is also looking at the clock. Round 1 is on the way toward
implementation on Jan. 1, 2011, and the ramp-up for Round 2 was set
for discussion at a March 17 meeting of the Program Advisory and
Oversight Committee, said the agency's Jonathan Blum.

Blum, director of CMS' Center for Medicare Management, staunchly
defended the DMEPOS bidding program at a conference lunch.

"We have two problems with the DME side of the Medicare
program," Blum said, noting first "a payment policy that is based
upon a statutory formula that we know is not the best possible
price for our beneficiaries and for taxpayers. We also have a
tremendous supply of providers … the best way to address both
challenges is through competitive bidding.

"To our minds," Blum continued, "no other program but
competitive bidding can ensure that we have the best possible price
and also the highest quality providers at the same time."

But "I'm not here to change your mind" about the program, he
told the audience of nearly 300 providers and manufacturers —
and he didn't.

John Shirvinsky, executive director of the Pennsylvania
Association of Medical Suppliers, summed up their sentiments: "No
matter how hard you guys work, it doesn't change the fact that
we're dealing with a fundamentally flawed program that's been put
into your hands …

"This industry is not going to be able to survive that," he told
Blum. "There will be business closings. On average, we depend on
Medicare for about 40 percent of our business just because of the
nature of what we do. This is going to hurt our customers. They are
going to lose their local suppliers … the neighborhood
wheelchair supplier, the neighborhood oxygen supplier is going to
disappear."

Blum's response was anything but encouraging. "We know the
changes are controversial. We know the changes are disruptive. We
know the changes have tremendous impact to our beneficiaries
… but this is a very high priority for the agency," he said.
Competitive bidding, he added, is the "first test in the agency's
ability to implement the much more comprehensive, wide-sweeping
changes" that Congress is looking for in moving away from a
fee-for-service payment system.

Following the lunch session, AAHomecare's Gorski quipped that
Blum's comments were "really motivational" for providers tasked
with getting legislators to stop the bidding program.

Those who traveled to Washington for the push on H.R. 3790 said
they were up to the challenge.

"I love what we do, and I think most people who are in this
business are in it to care for people," said Bill Cheek of
Carmichael's Home Medical Equipment in Monroe, Ga. "We improve a
lot of people's quality of life every day. We're just a small
company and I know what we do with our 10 employees, and it's
something to be proud of.

"It's something to fight for."

View more competitive bidding
stories.

Providers Take Sobering Job-Loss Projections to the Hill

Providers attending AAHomecare's Legislative Conference had some
sobering job-loss statistics to share with the nation's
legislators. According to an analysis by The VGM Group, if
competitive bidding is implemented as planned, the program will
cost more than 80,000 jobs in bid areas over the next three years,
with totals likely to exceed 100,000 in all areas. In addition,
according to the report:

93 percent of local providers will not be awarded
contracts.
As a result of the original Round 1 (delayed by
Congress in July of 2008), only 7 percent of local providers were
awarded contracts. CMS expects the rebid results will likely
resemble those from the first Round 1.

  • 42 percent of non-contract providers are likely to go
    out of business,
    a figure that corresponds to reports that
    the average HME provider gets 42 percent of its revenue from
    Medicare. "If 42 percent of all revenue is taken from a sector of
    an industry, it's likely the resulting consolidation will result in
    a reduction of an approximately equal percent of existing
    companies," the analysis said.

  • Medicaid and private insurers will reduce payment rates
    due to the program.
    "Generally, Medicaid and private
    insurers follow Medicare's lead when setting reimbursement rates
    for DME," the report noted. "Bid rates will undoubtedly result in
    significant reduction in payment from all payers, only reinforcing
    the fact that more than 100,000 jobs will be lost as a result of
    direct and indirect effects of the program."

  • Even contract suppliers will lose, on average, 33
    percent of their Medicare business, and 14 percent of their overall
    patient base.
    For the 7 percent of local providers
    receiving contracts, the average DME company will receive only four
    of six bid product category contracts based on original Round 1
    results.