Sound Off

Still struggling with what to say to your members of Congress about the bidding program? Try these “sound bites” to help explain what’s wrong:

• CMS must resolve the issues surrounding the round one bidding process. Companies that have offered quality home care services for decades, and that submitted three years’ of financial information in good faith, were arbitrarily excluded from the program apparently through no fault of their own. The vast majority of rejected bidders were informed that they had not submitted sufficient financial information, when the bidders believed they had. Cover letters sent in March from the CBIC did not provide any further detail about the bids’ shortcomings; providers had to call for an explanation. The original bid documents stated that the CBIC would notify bidders of any missing information, but that statement was missing from those same bid documents later in the bid window. Therefore, many bidders were led to believe that if there was missing information, they would be notified — but no such notification occurred. Providers first learned of the alleged missing documentation six months after the bidding deadline. Some home oxygen providers were disqualified for allegedly bidding too low on certain individual Medicare codes, while other providers based outside the market areas were offered contracts for similarly priced bids.
• There has been no transparency regarding critical details of the program. CMS has provided no information regarding how they evaluated bidders’ financial information, how they evaluated the bidder’s self-reported statements of their service capacity or how the CBIC calculated the single-payment amount. Data anomalies abound. In numerous product categories across multiple competitive bidding areas, identical single payment rates were established through the bidding process. This occurrence is highly improbable and suggests flaws in the bid calculation process. CMS should explain how it made these calculations to ensure accountability.
• Some 3.6 million Medicare beneficiaries will be impacted by round one. Beneficiaries have come to rely on the long-standing relationships they have with their home oxygen and DME providers.

Not only will they be surprised to discover their long-time provider may no longer be able to serve them effective July 1 but they will also be faced with obtaining services, equipment and supplies from multiple new suppliers, some of which may not be local or experienced in providing the care they need.

For diabetic patients alone, over 100,000 beneficiaries are expected to have to find another supplier before June 30, 2008.

The significant economic impact of the bidding program on local communities across America must be evaluated before CMS proceeds with implementation. Even prior to final contracts being certified, over 70 percent of eligible suppliers in these 10 round one bidding areas have been eliminated from the Medicare program for a three-year contract window.

Since Medicare payments can account for 50 percent of a small provider’s revenue, on average, a large portion of these businesses will not only be excluded from Medicare but forced into bankruptcy. The downstream impact on creditors and the economic stability of these communities (e.g., increased unemployment) cannot be dismissed.

One study by the Weeks Group conservatively estimates that a minimum of 14,575 jobs will be lost in the DME sector when the first two rounds of competitive bidding have been fully implemented.

In addition, inflation rates for certain provider costs have escalated since bids were prepared and submitted almost a year ago (e.g., fuel), so even providers who have accepted contracts will face an uncertain future without the opportunity for adjustment by CMS.

In the end, this means less choice and access for our seniors.

A specialist in health care legislation, regulations and government relations, Cara C. Bachenheimer is vice president, government relations, for Invacare Corp., Elyria, Ohio. Bachenheimer previously worked at the law firm of Epstein, Becker & Green in Washington, D.C., and at the American Association for Homecare and the Health Industry Distributors Association. You can reach her by phone at 440/329-6226 or by e-mail at [email protected].