CQRC Rejects CMS Claims About Competitive Bidding Access

WASHINGTON, D.C. (June 16, 2016)—Home respiratory care leaders disputed claims from the Centers for Medicare & Medicaid Services that recent and pending reductions in Medicare payments for Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS)—including respiratory therapy services and supplies—will not impact the delivery of essential health care services to seniors, particularly those residing in rural communities who have limited health care options and rely on the delivery of care in the home.

“We maintain that CMS’s data does not fully reflect the true impact of Medicare cuts recently imposed, let alone take into account additional cuts scheduled for July 1. We still have considerable concerns that CMS’s adjustments will harm access to care and health outcomes for Medicare beneficiaries,” said Dan Starck, CQRC Chairman. “To ensure the delivery of high quality home respiratory services are not placed at risk, lawmakers must enact legislation to phase-in these cuts more slowly and stabilize the competitive bidding program.”

Four months of patient data (January–April 2016) is misleading as well as insufficient to accurately assess the CMS claims. Given the way chronic respiratory diseases present and progress, it is unlikely that the impact of changes in services can be seen in such a short period of time. It requires at least a year of evidence at the current rate to understand whether it will disrupt patient care. The CQRC supports efforts underway in Congress to extend the current 6-month phase-in with an additional 15 months to provide a more complete set of data to assess the true impact of the cut.

While the data presented show no change in the outcomes reviewed, it is notable that at a time when mortality, admissions and emergency room visits are declining for other Medicare populations they are not declining at the same rate in the Chronic Obstructive Pulmonary Disease (COPD) population, despite the significant incentives that CMS put in place to improve these outcomes. Rather than indicate that the cuts are having no effect, it may be that the cuts are destabilizing the home respiratory therapy suppliers to the extent that it is making it difficult for other providers’ practices to improve health outcomes for COPD patients. More time is needed to sort through this information and understand what is really happening and why COPD patients are not realizing the same benefits from alternative payment models and value-based purchasing. Without adequate empirical evidence, it is impossible to assess the impact of these drastic cuts.

CMS has not followed its own rules for qualifying bidders and nearly 50 percent of winning bidders who promised to provide services were not licensed in the states in which they won bids. In addition, a recent OIG report that found that the competitive bidding rates CMS is rolling out in the areas Congress stated should not be competitively bid were set using bid rates from unqualified bidders. Including bids from these unqualified bidders when setting the competitive bidding rates distorts the payment rates. If these unqualified bidders had been eliminated at the time the rates were set, then the process would have increased the median rate, resulting in higher rates overall. More troubling is that while CMS recognizes the problem and ended the contracts with these suppliers, it has not adjusted the rates. Providing additional time for the phase-in would allow policy-makers to understand the impact of this problem. Miscalculated rates are not valid and should not be applied to the rest of the country.

“The CQRC remains deeply concerned that if these flawed competitive bid rates are fully applied to noncompetitive bid areas, beneficiaries will experience a substantial reduction in service, resulting in increased ER visits or readmissions, particularly among COPD patients,” added Starck. “It is also troubling that CMS is rushing to apply these flawed rates to a chronically ill and vulnerable population, those Americans struggling to live with Chronic Obstructive Pulmonary Disease,” noted Starck.

COPD is the third leading cause of death in the U.S. and refers to a group of lung diseases that result in patients not getting enough oxygen into their blood, and/or not being able to get rid of enough carbon dioxide. Twelve percent of Medicare fee-for-service beneficiaries live with COPD, which is more than those fighting Alzheimer’s Disease (11%), atrial fibrillation (8%), cancer (8%), osteoporosis (7%), asthma (5%) and stroke (4%). Dually eligible beneficiaries are 1.7 times more likely to have COPD than non-dually eligible beneficiaries. COPD patients often have five or more co-morbidities in addition to their respiratory disease. There is evidence of a gender disparity in COPD: women are surpassing men in terms of morbidity and mortality. Women are twice as likely to be diagnosed with COPD as men.

COPD is a costly and deadly disease, which can be effectively managed with home oxygen therapies.

Twenty percent of patients hospitalized with COPD exacerbations are readmitted to the hospital within 30 days, underscoring the need for access to quality home oxygen services to prevent avoidable readmissions. These exacerbation costs account for nearly 70 percent of the estimated $50 billion in annual COPD expenditures, with readmission-related expenses ranking third highest among Medicare beneficiaries.

COPD can be effectively managed with the proper use of home respiratory therapies, including oxygen therapy and sleep therapy, to improve patient quality of life and reduce overall Medicare expenditures. The proper management of COPD in the home is critical to reducing emergency room visits and hospital readmissions. Medical research finds that long-term oxygen therapy provides evidence to reduce readmissions.

Yet despite this information, CMS has chosen to rush out a substantial cut justifying it with a limited amount of data. “Congress should act quickly to pass the Patient Access to Durable Medical Equipment (PADME) Act to extend the phase-in period and allow needed time to gather sufficient information to understand whether it is actually appropriate to apply inaccurate rates to the rest of the country,” added Starck.

Visit cqrc.org for more information.