Few New Competitive Bidding Details at Two-Day PAOC Meeting

BALTIMORE–CMS held a Program Advisory and Oversight Committee
meeting last month to give an overview of its Notice of Proposed
Rulemaking on DME competitive bidding, but committee members said
most of their questions about the proposed rule remain
unanswered.

The May 22-23 meeting was the first for the panel–charged with
the task of advising CMS on implementing Medicare DMEPOS
competitive bidding–since CMS issued its draft proposal on the
program last month (see HomeCare
Monday, May 1).

But PAOC member Cara Bachenheimer said CMS didn’t divulge much
new information that couldn’t already be found in the draft
rule.

“It was kind of a frustrating couple of days,” said
Bachenheimer, vice president, government relations, for Elyria,
Ohio-based Invacare Corp. “People are so hungry for answers to
their questions, but they just don’t exist at this time. CMS’
approach is that the regulation provides a broad framework, and
many of the details will be in subsequent documents that they will
issue after the final rule comes out.”

According to a summary from the American Association for
Homecare, the following are among key issues that were covered:

—Quality Standards and Accreditation: More than 5,600
stakeholders commented on the draft supplier quality standards,
which were released last November, with the most common complaint
that they were “too prescriptive,” CMS said. Agency officials
agreed and said they are working to adjust the standards. In one
clarification of another common complaint–that responding to a
beneficiary call within 60 minutes is unrealistic–CMS said it did
not intend to suggest that providers had to arrive at a patient’s
home within 60 minutes and would clarify this point or change the
wording.

Officials said they are also considering a number of comments on
the business standards in the draft, including the concern that
they are overly burdensome and that some of the standards should be
left to state and local laws.

But officials said they could not comment about a number of
other topics involving supplier standards and accreditation,
including whether providers in areas selected for the first round
of bidding could be grandfathered in if they are already
accredited. The agency said it would provide further guidance on
the question and announce solicitation of accreditation
organization applications after the final rule has been published.
CMS did say it would phase in the accreditation process, and would
require accrediting organizations to prioritize their surveys to
accredit providers in the initial 10 cities where the bidding
program is scheduled to begin.

—Rebates: The rebate provision in the proposed rule drew
opposition from several PAOC members, who cited concerns about
legal and administrative issues. Under the rebate program,
providers who submit a bid below the single payment amount that is
set would be allowed to offer a rebate to beneficiaries equal to
the difference between their actual bid and the payment amount. CMS
said the rebates would allow providers to be more competitive. But
PAOC member Dave Kazynski, president of VGM’s Homelink, noted that
beneficiaries are mainly concerned about quality, not a small
rebate. Home care providers “are not looking at market share,
they’re looking at survival,” he said.

—Sustainability: Several PAOC members also said they are
worried that unrealistically low bids would distort the process.
“There is no provision in the methodology to determine whether the
winning amount is sustainable,” said attorney Asela Cuervo, who
represents AAHomecare on the committee.

Committee members said other issues of concern include the
criteria for selecting cities and products for the bid; the bidding
process and winning bidder selection; how payment amounts will be
set; the absence of small supplier protections; the requirement
that a supplier would have to bid on an entire product category;
and how a mail order bid would impact the process.

However, Bachenheimer pointed out that the PAOC’s role is
advisory only. “CMS can hear our opinions but there’s nothing that
forces CMS to adopt them or even to explain why they reject
specific recommendations from the PAOC,” she said.

CMS is expected to release the final quality standards this
month, and the target date for release of the final competitive
bidding rule is October this year.

To view CMS’ Notice of Proposed Rulemaking on competitive
bidding,
click here.

For a summary of the proposed competitive bidding rule,
click here.

CMS is accepting comments on the proposal through June 30. To
comment, visit www.cms.hhs.gov/eRulemaking.