Industry Rallies to Battle Another Round of Competitive Bidding

ATLANTA — Home medical equipment providers and other
industry stakeholders vowed once again last week to muster forces
to fight CMS’ second attempt at DMEPOS competitive bidding.

And this time, they said, they feel like they have a lot more
leverage, thanks to supporters in Congress and the ravages of a
devastated economy.

On Jan. 16, the agency published an interim final rule for the project, which was
derailed in July — two weeks after its
implementation — by the Medicare Improvements for Patients and Providers
Act. The law mandated a variety of changes and delayed the
bidding project so procedural and other problems could be
fixed.

“I do think that it is very unfortunate that this was released
at the last point of President Bush’s administration,” said
Georgetta Blackburn, vice president of government relations for
Blackburn’s
Pharmacy in Tarantum, Pa. “But it is better to know what you
are working with than not. It sets the table for what we are going
to have to do … This will kick-start the year, but we have to
get some of these issues off the table and we have to make sure we
have a unified voice in doing so.”

Already the American Association for Homecare, Invacare Corp.,
Pride
Mobility Products and VGM Group have committed to seeking support for
suspension of the bid program from the new administration under
President Barack Obama.

In its first try at Round One, providers detailed problems with
CMS’ bid submission process and online bidding system, noted
missing financial documents that had been sent and went to court
over bid disqualification. Of 6,500 bids that were received, CMS
offered contracts to only 329 providers in the first 10 bidding
areas. Resulting reimbursements were cut by an average 26
percent.

“It’s not as though we haven’t learned [from the last time],”
said Blackburn, noting there now are people with muscle in
Washington “who want to hear what we have to say.”

And many of them are concerned about the resurrection of the
project, according to Seth Johnson, vice president for government
affairs for Pride.

“Committee leaders on both sides of the aisle are expressing
significant concerns about [CMS’] releasing this,” he said. “They
are very alarmed that this administration would go forward with
this rule in the last hours of the administration and would not
simply allow this to be something the new administration would
study closely and determine if they wanted to move forward with.”
(See CMS
Issues Interim Final Rule on Competitive Bidding, HomeCare
Monday Special Alert, Jan. 15.)

They may have another reason for concern about the project, too:
loss of jobs and businesses in an already severely damaged
economy. 

“I can’t imagine that anyone in D.C. can embrace a program that
would put 90 percent of providers [in the affected areas] out of
business,” said Blackburn.

“Last time, 501 oxygen providers in [the Miami bidding area]
were reduced to 44,” added Rob Brant, president of the Accredited Medical Equipment
Providers of America. “Four hundred power wheelchair providers
were reduced to 25. Do we really want to do that?”

The new interim rule, which is set to go into effect Feb. 15,
maintains most of the features of the previous rule. And under the
provisions that remain, only providers who win bids in competitive
bidding areas are allowed to bill Medicare.

“As feared by many in the supplier community, the new
regulations offer little in the way of relief to those affected by
competitive bidding,” wrote Alan M. Morris, regulatory analyst for VGM, on
the company’s Web site.

Calling the issuance of the interim final rule “an 11th-hour
thumb in the eye from the Bush administration,” Eric Sokol of the
Washington-based Power Mobility Coalition agreed.

“Despite numerous problems, which plagued the bidding process,
including glitches that marred timely provider enrollment,
providers being unfairly disqualified and accusations of providers
gaming the bidding process in certain product categories, the
interim final rule does little to address these issues,” he
said.

The coalition is working with others in the industry to “rescind
government-mandated consolidation of lawful providers while
ensuring needy beneficiaries access to quality products and
services,” Sokol said in a press release.

With the exception of Puerto Rico, which has been eliminated
from the bid, the new rule covers the same metropolitan
statistical areas as the first Round One and includes the same
products, with the exception of group 3 power wheelchairs and
negative pressure wound therapy devices. CMS also said it would
apply the same methodologies to calculate payment amounts and
select providers.

The interim rule does, however, provide for some feedback to
providers who, according to CMS, have not included complete
financial documentation — this time around only a year’s
worth of documents instead of the previous three — in their
bid.

“Suppliers that submit financial documents within a specified
time period known as the covered document review date will be
notified by CMS regarding any missing financial documentation,” the
agency said. “If a bidder is notified, it has 10 business days to
submit the proper information to CMS.”

Brant said he is concerned that providers who don’t read the
fine print could be blindsided by that rule. There is, he said, a
30-day window in which providers must submit their bids in order to
be eligible for notification if their financial documentation is
deemed incomplete.

“If you put in your documentation 30 days before the close of
that window, they’ll let you know if you have any missing
documents. But if you wait, if you’re later than the 30 days, they
won’t let you know and you’ll be disqualified,” he said.

While the interim rule states CMS will implement Round One
bidding in 2009 (with the next round of bidding in 70 areas to be
implemented in 2011), Brant noted it does not contain the
“important” dates, such as when the bid window opens or closes and
when exactly the project would begin. He was also disappointed that
the new rule does not require companies to have a physical location
in the state they are bidding to do business in.

“That was a problem in Florida,” he said. “You had oxygen
companies that didn’t even have a license to provide oxygen in
Florida and other companies in other categories that didn’t even
have a physical location.”

The few changes to the interim final rule and its implications
for beneficiary access and small business point up the importance
of fighting it, stakeholders said.

“People thought because it was delayed, that was the end of it,”
Brant said. “But it’s not. It is not magically going to go away. We
have to end it.”

A 60-day comment period for the rule ends March 17.

View the interim final rule as published in the Federal
Register as a PDF.

View a rule summary from the American Association for
Homecare.

To submit electronic comments on the interim final rule, go to
www.regulations.gov, then follow the instructions for
“Comment or Submission” and enter the file code “CMS-1561-IFC” to
find the document accepting comments.