IFR Clears Way for Round One Do-Over

WASHINGTON — Ignoring pleas from scores of legislators,
consumer organizations and HME associations representing thousands
of home medical equipment providers, CMS refused Friday to rescind
the interim final rule for DMEPOS competitive bidding.

The IFR, which requires a rebid of Round One in 2009, went into
effect Saturday, April 18.

“Based upon its review and on the need to ensure that CMS is
able to meet the statutory deadlines contained in [the Medicare
Improvements for Patients and Providers Act of 2008], the
administration has concluded that the effective date should not be
further delayed,” CMS said in a statement issued Friday afternoon.
(See the full text
in this issue.)

The decision to forge ahead in spite of numerous letters from
federal lawmakers calling for the rule to be rescinded surprised
some industry stakeholders. The latest, a
bipartisan letter sent last week to HHS, CMS and the Obama
administration, contained the signatures of 84 members of
Congress.

“I really am disappointed. I thought that, at the minimum, they
would delay the program,” said Seth Johnson, vice president of
government affairs for Pride Mobility Products,
Exeter, Pa. “I am quite confident that the CMS statement is not
going to be well received by the members of Congress [who called
for the IFR to be rescinded].”

Tyler J. Wilson, president of the American Association for Homecare,
also said CMS’ decision was unexpected. “Given the problems
highlighted in recent months and the congressional concerns, we are
surprised by the decision to move forward,” he said.

Since issuing
the IFR Jan. 16, CMS has been inundated with individual and
collective letters from members of Congress about the rule. Among
serious problems, they said, the IFR does not adequately address
the issues that compelled Congress to halt Round One of the bidding
program two weeks after its implementation last July.

“They’ve made absolutely no changes from last year, and that
doesn’t sit well with people,” said Cara Bachenheimer, senior vice
president of Elyria, Ohio-based Invacare Corp.

Stakeholders had hoped CMS would stay implementation if only
because there is no permanent leadership at the agency’s helm.
Bachenheimer noted that, if confirmed, Kansas Gov. Kathleen
Sebelius, President Obama’s nominee to head the Department of
Health and Human Services, could yet come to the industry’s aid.
Sebelius said in testimony before the Senate Finance Committee she
would review comments about the controversial Medicare bidding
program.

“The administration extended the comment period for CMS’ recent
competitive bidding rule to ensure that all stakeholders have an
opportunity to review CMS’ proposed policies,” Sebelius told the
committee, adding that if she were confirmed, the comments would be
“reviewed very carefully in order to implement the policies
fairly.”

“The significance [of Sebelius’ comment] shows she has every
intention of coming in and looking at the program,” Bachenheimer
said, adding that she expects Sebelius could be confirmed as early
as Tuesday. “It’s going to be our job to pressure them to look at
this program and do what a lot of members of Congress are asking
[to suspend the rule].”

Johnson, too, said he is optimistic Sebelius could make a
positive difference. “I am hopeful that, based on what we have
heard about Gov. Sebelius … she will do a comprehensive
review and analysis about the problems that have been identified by
both the provider community and articulated in the numerous
[communications] from Congress and make some administrative changes
prior to the restart of the program,” he said.

Industry Fight Continues

Even with implementation of the IFR, Bachenheimer said, “I don’t
think this is the end.” She said the industry has an opportunity to
convince the new administration that, at the least, the IFR is
fundamentally flawed and should be tabled. And there are numerous
arguments for doing so, she said.

For example, Bachenheimer pointed out that the Obama
administration has already floated the idea of competitive bidding
for Medicare Advantage plans. While there aren’t many details as to
how that might be accomplished, there are two that could be helpful
to the HME industry, she said.

“One is that any willing provider can participate,” Bachenheimer
explained, contrasting that with the DMEPOS bidding model that
could eliminate as many as 90 percent of the providers in a bidding
area.

Another detail in the industry’s favor, Bachenheimer said, is
looking at the way bids are calculated. For Medicare Advantage
competitive bidding, the bids would be calculated based on the
average of all submitted bids rather than on the complicated DMEPOS
formula. “The ‘any willing provider’ is by far the more important
of the two,” Bachenheimer said, but both comparisons carry weight
in an argument against the IFR.

Johnson agreed the any-willing-provider card could make a strong
play in the current economy because the IFR would drive thousands
of providers out of business. “The new Congress is saying that they
want to do everything they can to protect small business,” he said,
“and on the other hand, the administration is going forward with
these projects that … are counterintuitive to those overall
goals.”

In a letter to HHS Acting Secretary Charles E. Johnson last
week, Rep. Glenn Thompson, R-Pa., echoed that contention. “In this
time of economic uncertainty, the last thing government should be
doing is creating regulations that will adversely affect small
businesses and remove real competition from the marketplace,” he
wrote.

So What Now?

Even as CMS rolled out its statement, the industry was moving
ahead.

“I think the next play for the industry … is to build on
the significant support that we have been able to [muster],” said
Johnson. “We need to continue to build support within Congress and
continue to convey the message that competitive bidding must be
stopped.”

AAHomecare has convened a task force to discuss options and has
hired a Washington health care consulting firm to develop several
cost
estimates for eliminating the bidding program.

There are several tracks the industry can follow, according to
Michael Reinemer, AAHomecare’s vice president, communications and
policy. “One is to work with Congress and with the HME community to
figure out whether we can eliminate the program. The sticking point
there would be how much would it cost in a pay-as-you-go
environment,” he said.

“The second would be to work with the new appointees at HHS
… to take a hard look at this rule and see what we can do in
addressing the problems through that channel,” Reinemer continued.
“And on another track, the Program Advisory and Oversight Committee
will reconvene, so there will be an opportunity there to …
see if all the concerns are thoroughly addressed.”

Last fall, CMS unexpectedly ended the term of the first PAOC, set up
to advise the agency on the implementation of competitive bidding,
then formed a new
PAOC in January.

John Gallagher, vice president of government relations for
Waterloo, Iowa-based VGM Group, said it was critical that
providers continue to communicate the delay-the-IFR message to
members of Congress. “The main thing is to make sure they are
involved with Congress,” he said, noting that if the IFR is not
rescinded by CMS, it will literally take an act of Congress to halt
it.

VGM has requested that Rep. Bruce Braley, D-Iowa, who supports a
delay in competitive bidding, work with House Energy and Commerce
Health Subcommittee Chair Rep. Frank Pallone, D-N.J., to include
language delaying bidding in his markup for the health care reform
package. (Congressional committees use the markup process for
debating, amending or rewriting proposed legislation.)

Braley’s office said the congressman would discuss working with
Pallone on his return from the Easter recess and added that he has
already been in contact with Rep. Heath Shuler, D-N.C., regarding
possible legislation.

Shuler, chair of the House Small Business Subcommittee on Rural
Development, Entrepreneurship and Trade, held a hearing in February
to discuss
the effects of competitive bidding and has called for its
elimination altogether. Following the hearing, Rep. Blaine
Luetkemeyer, R-Mo., said the subcommittee would draft a letter to
Small Business Committee Chairwoman Nydia Velazquez, D-N.Y., and
possibly recommend legislation.

One More Time for Round One Providers

Meanwhile, CMS said further guidance would be issued in the
coming weeks on the new Round One timeline and bidding
requirements.

Rob Brant of Miami-based City Medical Services and president of
the Accredited Medical Equipment
Providers of America, whose members went to court over bid
disqualification in Round One, said he is ready.

“I am fully prepared for Medicare to begin rolling out
timetables for the rebid while they explain that they are doing
their jobs as mandated by Congress,” he said. “At that point, the
industry will have to pull together again and request help for
legislators to repeal the program based on the recent cuts in
reimbursement, combined with increased quality standards with
mandatory accreditation and surety bonds.”

So, déjà vu all over again?

Reinemer isn’t so sure.

“I think because there are new faces, a new administration and a
new Congress, there are fresh ears,” he said. “This is a new ball
game to a certain extent.

“Part of our job,” he added, “is to remind people that …
we’re part of the continuum of care that takes care of seniors and
those with disabilities and keeps them out of the hospital. We’re
part of the solution for Medicare. And that’s the message we have
to relentlessly remind people about.”