PAOC Meeting: Much Ado About Little New

BALTIMORE–Despite a last-minute push on Capitol Hill for a
delay of competitive bidding, CMS is moving forward with its
implementation, government officials said last week.
Speaking at a June 16 meeting of the Program Advisory and Oversight
Committee, CMS Deputy Administrator Herb Kuhn acknowledged H.R.
6252, legislation calling for delay of the bidding program.

“He said, ‘We know there is legislation on Capitol
Hill that may change this. But given that it has not yet passed, we
need to go forward,’” reported HME consultant Mary
Ellen Conway, president of Capital Healthcare Group in Bethesda,
Md., who attended the all-day session.

Formed under the Medicare Modernization Act to advise CMS on
implementing competitive bidding, the PAOC held its first meeting
in 2004 and will meet periodically through 2009. But many of the
committee’s members have argued the group is ill-named: Some
say they’re playing a purely “advisory” role and have
no “oversight” over CMS.

At Monday’s meeting, held at the Pikesville Hilton, Kuhn
and other CMS staffers stuck to the agenda for the day: a review of
round one and a preview of the upcoming 2008 DMEPOS bidding system,
nicknamed “DBidS.”

Acknowledging some problems with the round one bid system and
education process, CMS sought input from the committee “on
how to improve the program moving forward,” said Seth
Johnson, vice president of government relations for Pride Mobility
Products, Exeter, Pa., and a member of the PAOC. “They
recognized that there were problems with round one, although they
said they were minor and could be easily fixed.”

PAOC members also asked questions involving licensure, networks,
financial benchmarks, repair issues and beneficiary education, but
the answers divulged little new information, they said.

“It was the usual frustrating experience,” said
committee member Cara Bachenheimer, senior vice president of
government relations for Elyria, Ohio-based Invacare.
“Nothing new.”
Attendees hoping for some idea of when details about round two
would be rolled out were disappointed on that level, too.

“All that was mentioned is that they are in the final
phase of testing the new DBidS, which will replace the online
bidding system that was utilized in round one,” Johnson said.
“[CMS’] Laurence Wilson indicated that further guidance
as to the timeframe for implementing round two should be released
within a month.”

CMS also discussed education of beneficiaries and referral
sources but lost credibility when audience members saw the brochure
the agency expects to be mailing soon. ”[It] did not mention
that negative [pressure] wound therapy would not be a bid item in
the Kansas City bid area, barely touched on the grandfathering
option and provided unclear information about advance beneficiary
notices,” according to the American Association for Homecare.
“The brochure also sported pictures of DME products that were
not subject to bid.”

A public comment period followed CMS’ presentation, and
Conway said one provider cited a dearth of information, saying that
while the agency has asked the industry to help educate
beneficiaries and referral sources on competitive bidding,
“we can’t do it because the information isn’t
there.”

The provider told CMS representatives that discharge planners in
the Pittsburgh area trying to find contract providers for enteral
nutrition patients were stymied because the providers that
supposedly won those contracts didn’t answer their phones,
Conway said.
Kuhn said CMS would try to reach those providers, she said.

In other notes from the meeting, AAHomecare reported:

–CMS reiterated it had gone over 100 of the disqualified bids
from round one and had made correct decisions in disqualifying
them.
–Bachenheimer argued that experience in providing HME items and
service should be a factor in choosing contract winners: “A
successful track record should count in your favor.”
–Asela Cuervo represented AAHomecare on the PAOC and inquired
about financial benchmarks, asking, “How does a company know
if it was disqualified because of their credit score?” Joel
Kaiser, CMS deputy director for DMEPOS policy, replied, “We
didn’t disclose financial benchmarks because we didn’t
want people to have an opportunity to ‘cook the books.’
You’ll know what shape your business is in on your
own.”
–In what some providers in the audience interpreted as a threat,
Kaiser suggested several times that additional studies of the HME
industry by the HHS Office of Inspector General may be undertaken.
He also suggested a link between the high number of providers in
Miami and fraud. According to the charts CMS used in its
presentation, there are 488 oxygen providers in Miami but only 43
contract winners–fewer than 10 percent. For enteral nutrition,
there are 338 providers in Miami but only 29 winners.
–Walt Gorski, AAHomecare vice president of government affairs,
said during the public comment period that the shortcomings in
round one should be corrected prior to round two.

AAHomecare said about 80 people–including six armed policemen
invited by CMS–attended the meeting.