Providers Hit the Streets to Protest NCB

MIAMI — Home medical equipment providers offered some
advice to HHS Secretary Kathleen Sebelius on Friday: If you want to
stop fraud, stop national
competitive bidding.

Sebelius and U.S. Attorney General Eric Holder were in Miami
July 16 to kick off what will be a series of regional health care
fraud summits; Los Angeles, Las Vegas, Detroit, Boston and
Philadelphia are in line for future meetings. The Miami event
featured federal, state and local law enforcement officials,
Medicare beneficiaries, providers and others discussing ways to
eradicate health care fraud.

While HME stakeholders were not at the table, they were on the
streets. About 100 providers and beneficiaries wearing bright
shirts proclaiming “Medicare bidding is fraud” greeted Sebelius and
Holder when they pulled up to the James L. Knight Convention
Center.

“We appreciate what they are doing to curb fraud and to cut
waste, but they need to look at their own programs,” said Rob
Brant, president of the Accredited Medical Equipment Providers of
America, which was instrumental in getting the protest together.
“[DMEPOS competitive bidding] has been administered in a fraudulent
manner,” Brant said. “They are changing the rates based on the
lowest bidders, and they [allowed in] companies that are bankrupt
in everything but name.”

Roger Ribas, president of the Florida Alliance for Home Care
Services, said CMS has ignored the concerns of the elderly and
those of accredited HME providers. “Congress delayed this program
in 2008 because Medicare allowed out-of-area, inexperienced,
financially bankrupt companies to win with desperate ‘suicide
bids,’” Ribas told reporters at the protest. “The only thing that
has changed in the rebid is that Medicare lowered their financial
qualifications and the new rates are now much lower than
manufacturers’ cost.”

He added: “Despite the fact that Medicare does not require
same-day deliveries, or brand-name products, or local providers, or
experienced providers, or financially sound providers, they are
still trying to promote this as a benefit to the elderly.”

A FAHCS press release stated that “Medicare bidding will create
fraud, because at 40 percent to 60 percent reductions in
reimbursement, we can be almost assured that the only way to stay
in business will be to commit fraud.”

Medicare’s new Round 1 rates, which are set to be implemented
Jan. 1, 2011, average a cut of 32
percent off current allowables across bid categories. Industry
advocates have said the rates are unsustainable and will result in
serious fallout that includes the demise of hundreds of businesses,
loss of beneficiary access, increased hospitalization costs and
elimination of up to 100,000 jobs in the competitive bidding
areas.

While CMS has said it would not reveal the names of contract
holders until September, Orlando, Fla.-based Rotech Healthcare
announced last week it had netted 17
contracts. That sparked disbelief and outrage on the part of
industry stakeholders, who noted that the company, which said it
expects to lose $900,000 in the first quarter of the contracts, is
more than a half-billion dollars in debt and must pay it all off by
2012, 15 months into the three-year bidding contract. (See
“Rotech,
Lincare and Competitive Bidding: How Will It All Play
Out?“.)

Protestors on Friday tried to make that point to Sebelius and
Holder with signs that read “Medicare bidding is fraud: No location
+ no experience + no financials = bid winner.”

“We want to give them the message that they are touting that
this program is so wonderful and it is going to be so good for
patients, but it is going to be a lot of problems for patients when
you have inexperienced, out-of-the-area and financially bankrupt
companies as your bid winners,” said Brant. “It just doesn’t make
sense.”

Bad News

Meanwhile, in tandem with the summit, Sebelius and Holder
announced the largest federal health care fraud takedown since the
Medicare Fraud Strike Force began operations in 2007. Charges were
unsealed against 94 defendants in five cities — including 24
in Miami and others in Baton Rouge, La.; Brooklyn, N.Y.; Detroit;
and Houston — for allegedly submitting more than $251 million
in false claims.

While the charges are based on a variety of schemes, many
involved home health and DME, according to press reports.

There was more bad news. Even as the summit was going on,
stakeholders continued reaction to an Orlando Sentinel
column by Mike Thomas (July 14) in which HME
providers were, at best, painted as crooks — and which
attacked Rep. Kendrick Meek, D-Fla., now a candidate for the
Senate. Meek introduced H.R. 3790, the bill that would repeal
competitive bidding, last fall.

“This is a column about waste, fraud, abuse and self-destruction
by U.S. Senate candidate Kendrick Meek,” Thomas wrote in the
column, titled “Why would Meek oppose savings for Medicare?”

Wayne Stanfield, president of the National Association of
Independent Medical Equipment Suppliers, called the piece “biased
and uninformed,” while AMEPA termed it “one of the most misleading
articles about DMEPOS bidding ever published” and called on its
members to respond.

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stories.