CMS’ Wilson: Competitive Bidding to be Implemented as Scheduled

WASHINGTON — As HME advocates gathered in the nation’s
capital last week to push for a delay of competitive bidding, a CMS
official said the agency plans to move forward with the first two
rounds of the program as scheduled.

“We have a legislative mandate, and we’re not going to approach
it and plan to fail. We’re going to approach it and plan to
succeed,” CMS’ Laurence Wilson, director of the agency’s
Chronic Care Policy Group, told some 350 attendees–a record
turnout–at the American Association for Homecare’s
Legislative Conference on Tuesday. “We will move forward with the
program and watch very closely to see if adjustments need to be
made.”

While the law does provide some “wiggle room” to adjust
implementation dates, Wilson said round-one contracts will be
enforced beginning July 1 and noted CMS does not anticipate the
major delays the industry is hoping for.

While Wilson promoted competitive bidding as a way to set more
accurate prices, a number of conference attendees expressed concern
during a Q&A session after his presentation that the bidding
program will put providers out of business and that CMS will not
have time to evaluate the effects of round one before moving on to
round two.

“This is bad public policy,” said Tom Ryan, president and CEO of
Farmingdale, N.Y-based Homecare Concepts. “We’re moving too fast
with this program … I’ve been in business for 20 years. I
want to make it to 25.”

The agency is evaluating round one in stages, Wilson explained,
and has already identified some areas that need improvement,
including boosting supplier education, streamlining financial
documentation requirements and upgrading the bidding software,
which caused major headaches for bidders in the first round.

After round one begins, DME contractors will survey
beneficiaries on whether or not they received the right products
and if their needs were met, he said. CMS also will monitor call
centers to become familiar with the problems beneficiaries and
providers are experiencing.

“There are a lot of things we haven’t gotten to yet. We hope to
learn from round one and apply those lessons to round two,” Wilson
said. “I know it’s not a popular program, but it’s the program we
have to work with, and we want it to work as smoothly as possible
and be a success.”

Contract suppliers for round one should be announced in April,
he said, adding that an official timeline, exact Zip codes and
products for round-two implementation should be released in the
next “weeks or months.”

Wilson also said CMS is looking “very closely” at implementing
prices set under competitive bidding in non-bid areas. A round
three of competitive bidding also is a possibility, he said.

In response to questions asked during the session, Wilson
also:

–Said if a supplier won’t accept the median bid, the contract
will be offered to the next supplier. When a provider in the
audience asked what would happen if suppliers keep rejecting the
contracts, he said, “If we cannot meet demand, we can’t have
competitive bidding for that product.”

–Expressed interest in a recently published study that analyzes
the competitive bidding demonstration projects in Polk County,
Fla., and San Antonio. (Authored by Brett Katzman, PhD, associate
professor of economics at Kennesaw State University near Atlanta,
and Kerry Anne McGeary, PhD, associate professor of economics at
Drexel University in Philadelphia, the study concludes that CMS’
format for competitive bidding is fatally flawed and, in many
instances, results in higher prices and poorer quality of
service.)

While Wilson said the agency would not give much credence to a
Robert Morris University study that looks at the current bidding
program because it was industry-commissioned, he said he’s
interested in reading the study on the demonstration projects
because it is peer-reviewed and has been published in a
journal.

–Said CMS is not required to protect small businesses under the
Medicare Modernization Act; the agency is only required to make
sure small suppliers are included in the program. “At the end of
the day, this is a program that picks winners and losers. Some are
small and some are big.” Wilson also could not offer a percentage
of providers who will win or lose out of those who placed bids.

–Announced that CMS plans to hold a PAOC meeting early this
summer to get further feedback on the program.