Weigh-In on the House Hearing

WASHINGTON—It could be considered a David-vs.-Goliath
battle. On one side, pushing for competitive bidding, there are the
mighty AARP, powerful members of Congress and the Centers for
Medicare and Medicaid Services.

On the other side, there are legions of small home medical
equipment providers, patient advocacy groups, the American
Association for Homecare and other HME organizations.

Last week, everyone had a chance to weigh in, either verbally at
the House Energy and Commerce Subcommittee on Health hearing Sept.
15 in Washington (see story this issue), in comments submitted to
the committee or made in various venues afterwards.

Following are some of the observations on the issue of Medicare DMEPOS competitive
bidding:

• AARP (in written comments to the subcommittee):
  “AARP believes that competitive bidding should be used for pricing
  durable medical equipment, prosthetics, orthotics and supplies, as
  long as quality and access are not compromised by the competitive
  bidding process. If the competitive bidding program achieves the
  goal of setting more appropriate payment amounts for DMEPOS items,
  it will result in reduced beneficiary out-of-pocket expenses as
  well as savings to taxpayers and to the Medicare program.”

• Rep. Henry Waxman, D-Calif., chairman of the House
  Energy and Commerce Committee (in his opening statement at the
  hearing): “I take seriously the concerns raised by the
  supplier community regarding potential threats to beneficiary
  access to high-quality DME. Competitive bidding has been tested
  successfully in Medicare, but not on a scale as large as what the
  law requires [the Centers for Medicare and Medicaid Services] to
  implement over the next few years. It is essential that we on this
  committee continue to monitor developments in the competitive
  bidding program as it unfolds.

  “But I question those who say that we need to repeal the program
  now because of speculative threats to beneficiary access in the
  future. Where is the evidence for such a threat? It is certainly
  not found in previous experience with competitive bidding in the
  Medicare program.

  “I am cautiously optimistic that competitive bidding for DME may
  soon begin to finally achieve its promise of reducing Medicare
  spending while maintaining or improving the quality of care
  received by beneficiaries.”

• William J. Scanlon, health policy consultant and hearing
  witness (in a statement presented at the hearing):
  “Competitive bidding for [DME] is one step in attempting to make
  the Medicare program a more efficient purchaser of services for its
  beneficiaries … The one area that stands out for not having
  payment methods reformed in a fundamental way is DME. Efforts to
  refine Medicare DME payment levels administratively have proven
  cumbersome and unworkable. Competitive bidding offers an
  alternative which is conceptually sound and appears feasible
  … It creates the incentives for providers to supply Medicare
  with the information needed to set prices as well as be willing to
  supply products at lower prices.”

• Seth Johnson, vice president, government affairs, Pride
  Mobility Products, Exeter, Pa.: “I was pleased that many
  members of Congress expressed [reservations] about the program in
  their opening statements.

  “I thought Congressman [John] Shimkus [R-Ill.] , the lead
  Republican on the committee, raised some very good points,
  especially when he talked about the private sector and how they
  audit payments before they make them. There is a lot of waste built
  into the overall Medicare program. The Medicare program is broken,
  but it is not broken because of DME. It is broken in the
  fundamental way the program operates, which is significantly
  different than the way the private sector works.”

  On the issue of transparency: “The program is set to start in
  just over 14 weeks and we still don’t know who the winners are.
  Those that are disqualified have not been contacted … That
  information is really important for the industry to evaluate in
  order to determine whether CMS made the decisions as to winners and
  losers that made up the single-payments amounts in an appropriate
  manner. CMS seemed confident that they had providers out there who
  will do it at those rates. If that is so, I don’t see why they
  don’t release those contact winners.

  “There is a disconnect between what CMS is saying and what CMS
  is doing. If they can’t get companies to participate in the program
  when their bids were lower [than the new rates], how can they
  expect to get companies who bid higher to accept the
  contracts?”

• Walt Gorski, vice president, government relations,
  AAHomecare: “[CMS] will be doing studies, yet at the same
  time, they will be starting Round 2 before they get the results for
  Round 1. CMS clearly does not have a Plan B in the event that this
  program craters. They were very vague on what they would do if they
  run into contract providers who are unable to fulfill their
  obligations. Providers may not be around [to get another].”

• Rep. Frank Pallone, D-N.J., chairman of the Energy and
  Commerce Subcommittee on Health (in his opening statement at the
  hearing): “I have been skeptical of this program in the
  past, and I am anxious to hear from CMS how this program is being
  run and, of course, how the Round 1 rebid is developing.

  “That being said, I am also aware of the fact that CMS is
  carrying out the law as instructed by Congress. I know very well
  the concerns of the DME suppliers and it is my hope that CMS has
  done their best to address some of them …

  “It’s obvious that we cannot ignore what will become clear here
  today—there remains a large constituency that is simply
  opposed to this program. Meanwhile, the fear of tremendous
  consequences persists from both industry and from members of this
  committee. So, regardless of where this committee falls, it is our
  job to keep a watchful eye on its development and be on guard to
  make changes if necessary.”

• Jim Tozzi of the Center for Regulatory Effectiveness and
  former deputy director Office of Management and Budget (in written
  comments to the subcommittee): “Maintaining access to home
  medical equipment, and to the quality services essential for its
  provision and use, is a substantial concern for Medicare
  beneficiaries and to their families. We have received hundreds of
  calls on our toll-free hotline from people concerned about what the
  Medicare competitive bidding program would mean for health and
  their peace of mind. Many of the callers expressed concern and fear
  that the competitive bidding program would mean that they would
  lose access to the DME care providers they know and trust.

  “Many of the callers to our hotline also expressed strongly held
  views that the competitive bidding program reflected a lack of
  concern about their well-being by our nation’s leadership. We have
  posted the transcripts of the calls along with the original audio
  recordings on our Competitive Bidding Interactive Public Docket’s
  Discussion Forum so you can hear the voices of the people affected
  by this program, www.thecre.com/Forum/.”

• David Petsch, owner, Petsch Respiratory Services,
  Martinez, Ga., and founder of CSIHME (in comments to the Georgia
  Association of Medical Equipment Services): “My take right
  now is that we have been heard, but will have to continue to prove
  why the patients will be injured, receive lesser quality than now
  and the replacement of lots of providers with fewer providers is
  going to be a bad thing. In other words, I think until someone
  dies, is injured or costs are not controlled, they will have a
  hesitation for the program to be halted … They continue to
  use the bad guy as an excuse to reprimand everyone, and our image
  is difficult to clear up.”

• National Association of Chain Drug Stores (in written
  comments to the subcommittee): “CMS has repeatedly stated
  that it plans to expand the competitive bidding program into the
  retail pharmacy market. However, expansion of the competitive
  bidding program to the retail setting will limit beneficiary
  access, possibly resulting in lower quality services, leading to
  increased medical costs. This is especially important should the
  program be expanded into the area of diabetic testing supplies
  (DTS) … Any disruption in the ability of individuals to
  receive their diabetic testing supplies could result in increased
  illness and increased medical costs, both of which would be
  avoidable if beneficiaries continued to have access to their
  supplies at the retail level.

  “Any expansion of the competitive bidding program beyond the
  Round 1 program should be delayed until the Round 1 program is
  complete and data from the experience are fully analyzed for
  lessons learned and best practices which can then be applied to the
  national mail order program. This will allow sufficient time to
  properly gather, review and analyze data from the Round 1 program
  …

  “The plan to expand the mail-order program for diabetic supplies
  would not be supported by any evidence that the program would
  ensure quality products and services or guarantees as to patients’
  access to life-saving diabetes testing supplies. Additionally, the
  mail-order expansion would fragment patient care by requiring a
  beneficiary to obtain supplies from one source, i.e., mail order,
  and medication from another source, i.e., local pharmacies. This
  increases the possibility for patient confusion, disruption of
  therapy and waste, all of which can contribute to overall program
  costs.”

While Waxman and others at the hearing appeared intent on moving
forward with competitive bidding, a number of representatives on
the subcommittee voiced serious concerns about its efficacy. More
than half of the members of the House of
Representatives—255—have signed on as cosponsors to
H.R. 3790, the bill that would repeal the bidding program.

Another hearing on the program, this one called by Rep. Pete
Stark, D-Calif., of the House Ways and Means Committee, is
tentatively scheduled for later this month.

“I am hopeful that the Ways and Means hearing that is supposed
to take place … will include more provider
witnesses—hopefully, someone from the Round 1 bidding
area—a hospital discharge planner and an economist who can
underscore the problems with the competitive bidding program,”
Pride’s Johnson said.

See House Members
Question Competitive Bidding for more on the Sept. 15
hearing.

View more competitive bidding
stories.