Unknowns Hold Some Round 1 Bidders Back

ATLANTA — The Centers for Medicare and Medicaid Services
flung open the bid window for
the Round 1 rebid of the DMEPOS competitive bidding
program on Wednesday, but the unsettling health care reform
environment was causing some providers to hold back on submitting
bids.

According to CMS, all bids must be submitted in DBidS, the
CBIC’s online bidding system, by 9 p.m. prevailing Eastern Time on
Dec. 21. All required hardcopy documents for the bid package must
be postmarked by 11:59 p.m. on Dec. 21. Pricing will be released in
June 2010, followed by the announcement of bid winners in
September. Round 1 implementation is currently scheduled for
January 2011.

CMS has also established a Nov. 21 deadline for providers who
want to be included in the
covered document review process. The agency will notify those
who submit their hardcopy financial documents by that date if they
are missing any documentation.

During an Open Door Forum Wednesday afternoon, the agency’s Joel
Kaiser, deputy director of DMEPOS policy, said the DBidS system was
“operating smoothly” and that “as of 11 o’clock this morning, we’ve
had a number of bidders that have already completed Form A … so
that’s good news.”

Other Round 1 providers, however, said they weren’t rushing in
to bid.

“I see no reason to bid early,” said Joel Marx, CEO of Medical
Service Co. in Cleveland. “There is nothing to be gained aside from
the satisfaction of getting your bid in early and on time. I
understand if you get the paperwork in early, they’ll tell you if
it is complete. Right now, we are still dissecting numbers and
waiting to see what happens.”

With health reform still in play on Capitol Hill and packages in
both the House and the Senate containing provisions that would
affect home medical equipment providers, it’s tough to put together
accurate, reasonable bids, providers said.

“The thing that has me most concerned is that tax on
manufacturers,” said Georgie Blackburn, vice president of
government affairs for Blackburn’s Pharmacy in Tarentum, Pa.,
referring to the Senate Finance Committee’s health care reform
package proposal to levy a device tax on
manufacturers.

With just eight weeks until the bid window closes, providers are
in the midst of formulating bids based on the current cost of
products, but a tax on manufacturers would likely cause that cost
to rise, Blackburn said.

“As a provider bidding in Round 1, that has me concerned. You
have to know all your costs before putting a bid out there and hope
you can sustain it for three years (the length of a bid
contract).

“Manufacturers might incur this huge expense through health care
reform, and that skews the bids,” she continued. “This will
absolutely impact our cost going forward. I don’t see how the bid
window can be open without health reform being [complete].”

Chris Rice of Diamond Respiratory Care in Riverside, Calif.,
said he also is waiting, though he wants to meet the Nov. 21
deadline for document review. He, too, questioned the impact of the
device tax should it be implemented.

“The better [manufacturers’] pricing, the better our bid,” he
said. “What is a device tax going to do to those of us bidding down
the road?”

Backing the Meek Bill

Even as providers ran numbers and worried about the impact of a
medical device tax, they also were campaigning for sponsors for
H.R.
3790. Introduced Oct. 13 by Rep. Kendrick Meek, D-Fla., the
budget-neutral bill calls for a complete repeal of the Medicare
DMEPOS bidding program, which was delayed by Congress after a
two-week implementation in July 2008. As of press time, the bill
had garnered 38 cosponsors.

Last week, both Blackburn and Rob Brant, general manager of City
Medical Services in North Miami Beach, Fla., spent time on the Hill
talking to legislators about the perils of bidding for DMEPOS.

“It looks like the Florida legislators will sign on,” Brant said
on Wednesday, adding that he was encouraged by the reception to the
Meek bill. “I feel at the end of the day like they are going to
repeal [competitive bidding],” he said. “But I am putting my bid
in.”

Brant said he expected the same problems with the rebid as there
were in the original Round 1.

“I don’t expect anything different. It’s déjà vu all over
again,” he said. “Medicare is basically doing the same thing,
saying the same thing, using the same methodology as before. There
is no judicial review, no transparency.”

Brant believes this time around there will be far fewer
companies bidding, with many done in by the first Round 1, or by
the mandates for accreditation and a surety bond, or by the 9.5
percent DME reimbursement cut and the 36-month oxygen cap.

“There are so many companies that are leaving the program. Some
were accredited and said, ‘I can’t stay in business anymore with
all this and still provide quality products and services,’” said
Brant, who is also president of the Accredited Medical Equipment
Providers of America. “I can see how people can throw in the
towel.”

According to CMS, he noted, only 205 DME providers still exist
in Miami-Dade County after the mandatory accreditation and surety
bonds were implemented this month. AMEPA had predicted that 200
would be left standing, but 205 is still a near 50 percent drop
from before, Brant said. Competitive bidding will further reduce
the number. (See related story in this issue.)

Blackburn said she believes federal legislators are getting the
message, and Meek’s office is being particularly aggressive in
getting it out. “I was in Meek’s office and it was very good to see
that this office is working so hard to get the 100 signatures we
feel we need [on H.R. 3790],” she said.

‘Work like It Won’t be Passed, but Pray like It Will’

Both Marx and Rice said they also are campaigning for support of
the Meek bill.

“I think that is probably the most important thing we can do
right now,” Marx said. He cautioned, though, against banking on the
Meek bill’s passing and taking effect before the bid window
closes.

“I don’t expect it to impact the deadline of Dec. 21, but it’s a
start. It’s a good Plan B, but don’t make it your Plan A,” he
advised, adding that providers need to “work like it won’t be
passed, but pray like it will.”

Rice said he is trying to get California legislators on board
with the bill. “I have my congressman’s administrative aide on
speed dial,” he said. “I don’t think as a stand-alone bill it is
going to go anyplace, but I do have some hopes that it can be
attached to something else.”

John Shirvinsky, executive director of the Pennsylvania
Association of Medical Suppliers, said there are opportunities for
the Meek bill to ride on another, larger bill.

“You have health care reform that is working its way through,
and the doctor’s bill that has cropped up,” he said, referring to a
Senate bill that would halt Medicare reimbursement cuts to
physicians. The so-called “doc fix” bill, however, failed
to clear an initial Senate hurdle last week, likely ensuring
doctors will have to wait until health care reform legislation is
finished before Congress returns to the issue.

“So opportunities exist, and for all intents and purposes, we
have until a year from now,” Shirvinsky said of the Round 1
implementation. “But it would be nice to get rid of it now so
people wouldn’t have to go to the expense of putting in a bid.”

However, he continued, “We can’t count on [competitive bidding]
being repealed. The Meek bill is a heck of a battle. There’s a lot
of heavy lifting. We’ve got to fight harder to get our voice heard.
But we can do it.”

Shirvinsky and the providers interviewed for this article
stressed that every provider, whether in Round 1 or not, should be
campaigning for the Meek bill.

“We are all in Round 1,” both Shirvinsky and Blackburn said.

“The Senate Finance Committee [reform bill] is expanding Round 2
to 100 metropolitan statistical areas and fast-tracking the date
for applying competitive bidding results to the rest of the
nation,” Shirvinsky said. “Everyone should be concerned about
this.”

Marx agreed. “We are all going to be affected by the pricing,
whether you win the bid or don’t win the bid. The question is
whether you even have a seat at the table,” he said.

“This affects every provider,” Blackburn emphasized. “Our focus
now has to be as providers getting our representatives signed on
[to the Meek bill] … The bill is a good one, the pay-for is
fair and the industry as a whole will stay intact. I hope we can
get traction, because competitive bidding is not the answer to
health care.”

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