Washington Action Reverberates at Medtrade Spring

LONG BEACH, Calif.–Medtrade Spring attendees expecting a somber
show and bleak industry forecast instead were re-energized last
week when industry efforts in Washington, D.C., took a turn for the
better.

Even as the 4,000 participants–2,600 of them providers,
according to show officials–converged on the Long Beach Convention
Center Tuesday, HME representatives were attending a hearing on
Capitol Hill centered on competitive bidding (see full report in
this issue). And that hearing, in which House Ways and Means Health
Subcommittee Chairman Pete Stark, D-Calif., said he would try to
block the program, led to a follow-up meeting on Thursday with
Stark’s staff to discuss alternatives.

“AAHomecare chairman Alan Landauer is leaving here today
for a meeting up on the Hill tomorrow … to discuss options
for going in a different direction than competitive bidding,”
association President Tyler Wilson told his audience during a
Wednesday morning Washington update at the spring trade show.

Speaking before a packed room, Wilson offered a brief summary of
the Ways and Means hearing, which included testimony from Kerry
Weems, acting CMS administrator–who told the committee
“there are no problems” with competitive bidding–and
provider Tom Ryan, former AAHomecare chairman and CEO of
Farmingdale, N.Y.-based Homecare Concepts, who spoke on the
association’s behalf.

After pointed questioning from committee members, Wilson said,
the upshot is that “a whole bunch of important people are
going to rethink this …We are building up political
headwind.”

But getting rid of competitive bidding will take some doing,
Wilson said, and it won’t come without a cost.

CMS has already said it expects to save $1 billion annually
through the DMEPOS bidding program, so the industry must come up
with a way to save that money if the program is eliminated. Based
on a Congressional Budget Office estimate of the cost of ending the
program, Wilson said that means $6 billion might need to be cut
from HME reimbursement over five years unless other alternatives
surface.

Wilson quizzed providers on whether they would be willing to
take an across-the-board reimbursement cut in return for
competitive bidding “going away.”

A five-percent cut got an almost unanimous show of hands. A
10-percent cut drew about an 80 percent showing. At 15 percent,
providers started grumbling, but there were still a plentiful
number of hands in the air.

Reworking the program, however, did not appear to be acceptable.
Audience member Cindy Justice, vice president and general manager
for Melbourne, Fla.-based RespiCare of Central Florida, said she
could not fathom redoing round one. “It just makes me sick to
think about it,” she said.

“We don’t want to have the program retooled if there
is a chance of getting the whole thing thrown out,” Wilson
said.

He noted the industry is working on multiple fronts to get at
least a delay of competitive bidding. Already, two lawsuits have
been filed, one in the Dallas CBA and one in Cleveland, and another
is in the works. In recent weeks, legislators on both sides of the
aisle have sent letters detailing serious problems with the program
to Department of Health and Human Services Secretary Michael
Leavitt and chairs of key legislative committees.

In addition, AAHomecare is ramping up the industry’s
visibility. Before the hearing, the association placed an ad
challenging competitive bidding in Roll Call, a popular
Capitol Hill newspaper.

Consumer media is also starting to take notice. On Tuesday, an
article on competitive bidding–in which Stark was quoted as saying
he would like to see the program “scrapped”– appeared
in the Wall Street Journal. The Washington Post
also reported on home oxygen reimbursement cuts and service
issues.

“The stars are beginning to align,” Wilson said.

Walt Gorski, AAHomecare’s vice president of government affairs,
attended Thursday’s meeting with Stark’s staff. While he could
offer no new details, Gorski said, “AAHomecare is working with
congressional staff to explore various options that are available
to us in the short time remaining before the bidding program goes
live in July.

“I think we have to be very mindful and cautious at this stage
of the game. Obviously, no plan has been crafted, and it is
premature to discuss actual ways to offset any policy changes. But
clearly, any changes will require offsetting revenue …
We’re at the starting line of seeking redress from
competitive bidding, and what the final outcome [will be] is still
unclear.”

Gorski added that the industry is only now beginning to see some
results from years of efforts to stop competitive bidding.

“Our work has gained some traction,” he said.

While last week’s action offered providers a glimmer of
hope, Wilson stressed there is much work yet to be done. “You
have to craft a solution, get the legislation and the Senate and
House together, then decide what vehicle it will move forward
on,” he pointed out during the Medtrade Spring session.

To achieve any of that, providers must get involved in the
process, he said. “We need our voices to be supported by
yours,” he said, urging providers to call or email their
legislators to ask for a delay in the bidding program.

News of the action on Capitol Hill buzzed around the halls of
the convention center and on the show floor, with many providers
saying an across-the-board cut would be better than the 26 percent
average savings CMS said it would gain from competitive
bidding.

Even a 15 percent cut would be better, according to Cindy Riemer
Wolf, COO for Diabetic Care Services in Eastlake, Ohio. Her
company, a national diabetic mail-order business, bid in that
category in all 10 CBAs in round one and lost in every market.

“I’m very angry about this,” Wolf said.
“We take care of 125,000 people. We’ve been doing this
for 11 years.”

“We’re their support system,” added her
husband, Marc, a pharmacist and the company’s CEO.

Cindy Wolf said she resents the providers who won bids because
at the 43 percent pricing reduction that resulted in the category,
“they have removed the service component from what we do. And
all the folks who have won are not our competitors. Our competitors
all lost. These people [who won bids] haven’t even done this
before.”

She worries that patients will suffer because there will be no
one to look out for them. So, while 15 percent would be a tough
cut, “we’d swallow it and go,” Wolf said.

So would Jae K. Kim, C. Ped., CDF.

“They drop the fees based upon their research and we will
follow,” said Kim, president of Life Med Medical Supplies
& Equipment in Los Angeles. “Why do we have to take
bidding? This is stupid.”

Mark L. Sangree, vice president and general manager of RespiCare
of South Florida in Deerfield Beach, said elimination of round one
would be better than its delay or redoing. He could live with the
cuts, he said, but the best thing would be “to require
accreditation but have a free marketplace.”

In case that doesn’t happen, though, Sangree and his peers
at the Long Beach show were actively searching for ideas on how to
live without Medicare. Sessions promising suggestions along those
lines bulged with attendees, and many vendors reported keen
interest in products that were not necessarily covered by the
government program.

“A lot of people are looking for new revenue,” said
Dave Cannon of Adroit Medical Systems in Loudon, Tenn., which
offered a continuous low-level heat therapy pump.
“They’re looking for new revenue streams.”

Traffic appeared brisk along most aisles of the show, despite
the fact that some major manufacturers opted out and the show had
been moved from its popular Las Vegas venue to Long Beach.

However, said Cannon, “This is the best show I’ve
ever been to.”

“This has been the best spring Medtrade we’ve ever
had,” agreed Jan Headrick, director of medical sales for Drew
Shoe Corp., Lancaster, Ohio. “And I think it’s because
it is not in Las Vegas.”

She’ll have a chance to compare outcomes: The show will
return to Vegas in March of 2009.