Round 1 Bid Window Closes Tonight

WASHINGTON — With the deadline just hours away for
submitting Round 1 bids, home medical equipment providers across
the nation continued through the weekend to fight the competitive bidding program that
threatens to put as many as 90 percent of them out of the Medicare
business.

At press time, H.R. 3790, the bill introduced by Rep. Kendrick
B. Meek, D-Fla., to stop the DMEPOS bid, had garnered 118
cosponsors, and more were in the works, stakeholders said. The
American Association for Homecare has set a conference call at 1
p.m. this afternoon to drum up additional cosigners. In addition,
42 clinical, patient and HME organizations have signed on to an
AAHomecare letter in support of the bill.

“I think we have a very good chance of making this happen,” said
Sean Schwinghammer, policy advisor for the Accredited Medical
Equipment Providers of America and the Texas Alliance for Home Care
Services, both of which were instrumental in getting Meek to carry
the bill. “I’m feeling good about it.”

Even so, the clock continues to click steadily toward the
bidding deadline. The bid window for Round 1 of the project, which
encompasses nine MSAs across the country and nine product
categories, closes at 9 p.m. ET tonight; required hard copy
documents must be postmarked by 11:59 p.m. Single-payment amounts
are expected to be announced in June 2010, with the names of the
winning bidders following in September-October.

‘Hands Tied Behind Our Backs’

“I made my list and I am checking it twice. I am just going back
over and back over it, really trying once again to look at our
costs, to look at our efficiencies and determine what that bid
price is,” said Tammy Zelenko, president and CEO of AdvaCare Home
Services in Bridgeville, Pa. She said she is bidding in multiple
product categories, but only in her own MSA of Pittsburgh.

But Zelenko, whose company was a bid winner in the initial Round
1 (aborted by Congress in July 2008 because of numerous problems),
said she has a “different feeling” about this go-round than she did
then.

“I am much more concerned — much more concerned,” she
stressed. “Last time, I was pretty confident. Now I’m
frightened.

“I am very concerned that the bids are going to come in very
low,” she continued, noting that in the initial Round 1 the average
savings for Medicare was 26 percent across all product categories.
To pay for Congress’ bidding delay, the industry agreed to a 9.5
percent reimbursement cut in each of the covered product
categories, so already, Zelenko pointed out, the allowable is less
than last time.

“They already have our hands tied behind our backs and a cement
bag over our head,” she said, referring to CMS. “They have already
told us we could not bid above the current allowable and that
current allowable has already been reduced 10 percent.”

She’s worried that providers desperate to keep their Medicare
business will submit lowball bids that are unsustainable. Such bids
might leave her out of the Medicare business. That’s not a business
breaker for AdvaCare since only 14 percent of its revenue comes
from Medicare, but it could be bad news for the winners and, thus,
beneficiaries.

“If you are not profitable now and you win that bid, you
certainly won’t be able to stay afloat,” Zelenko said.

CMS apparently has fears of its own regarding bid prices. The
agency has issued warnings to providers about any attempts to rig
bids or fix prices. “Any supplier suspected to have violated
Federal antitrust laws by engaging in practices such as price
fixing, bid rigging or other forms of collusion will be referred to
the Department of Justice for investigation and is subject to
having its bid rejected,” the agency repeated
in a message last week.

Repeat of Round 1, Repeat of Complaints

Even as providers scrambled to complete and enter their bids,
complaints and queries were still rolling into state organizations
and service groups.

“We’re getting questions every day about how to do the bid,”
said Schwinghammer. “Even when you are doing the bid, one
spreadsheet [is different from another]. One section will itemize
alphabetically, another won’t. Another does it by codes. It’s
haphazardly put together.”

Waterloo, Iowa-based member services group VGM has reported that
bidders in every competitive bidding area reported issues with
DBidS, the online bidding system, and the CBIC phone system. DbidS
shut down on providers as they were submitting their bids,
requiring them to start over again. The CBIC phone system
frequently experienced “technical difficulty,” leaving providers
with no way to get their questions answered.

Complicating matters is the fact that providers who do reach
CBIC representatives get different answers to the same question,
Schwinghammer said.

“There’s a lot of back-and-forth about tax records, getting them
signed, not getting them signed. After CMS sent out the
information, they said something else and you [as a provider] can’t
go back and change it [to reflect the new information]. It’s
fundamentally wrong,” he said.

In addition, providers are still struggling to understand CMS’
interpretation of capacity and weights and how it affects their
bidding, Schwinghammer said.

There are so many problems in the redo of Round 1 that even
Congress is starting to take notice, according to Schwinghammer. He
said a TAHCS Washington call-in last week netted at least two more
cosponsors for the Meek bill and more are imminent. Congressional
staff members even called Schwinghammer to indicate their
legislators’ interest in supporting the bill, he said, noting that
beneficiaries and physicians had also called legislators about the
negative effects of competitive bidding.

Schwinghammer said he has no doubt that the impact of this round
could be worse than last year’s would have been.

“With mandatory accreditation and surety bond requirements implemented
earlier in the year, there are far, far fewer providers bidding
than last year,” he said. “I would say there are half as many as
there were last time. There will not be enough providers to meet
the needs of the patients. That’s our fear right now.” (For more
from Schwinghammer, see “Commentary:
Provider Reduction Up to 88 Percent in First Round 1“.)

While she is happy to go into the holidays with the bidding
behind her, Zelenko, too, is fearful about the impact of the
bidding and providers’ abilities to respond to patient needs.

“We’re not even going to find out until next October [if we won
or lost the bid],” she said, “so you cannot plan.” The October
announcement is only three months before the Jan. 1, 2011,
implementation of the project, and that is not enough time for
companies to ramp up.

Zelenko said she is simply going to move forward as much as she
can. She is preparing to open her fourth location in a few months,
but that’s not so much optimism as it is the answer to a need.

“They need home care providers,” she said about the population
in the new location’s area. “We are a service industry, and they
need our service.”

View more competitive bidding
stories.

AAHomecare will hold a conference call at 1 p.m. ET
today to discuss grassroots strategies for support of H.R. 3790 to
stop competitive bidding. All HME stakeholders are invited
to participate, and there is no registration fee for the call. To
listen in, dial 712/432-0111 and enter code 246862#. To submit a
comment or question for discussion during the call, email Alex
Bennewith at [email protected] by noon
today.