AAHomecare Calls on Daschle, Congress to Rescind Bidding Rule

ARLINGTON, Va. — On Friday, the American Association
for Homecare sent a letter to Health and Human Services Secretary-Designate
Tom Daschle and chairmen of key congressional committees urging
them to review and rescind CMS’ new interim
final rule on competitive bidding.

“We view the bidding program as a bureaucratic, anti-competitive
price-setting system that will have the unintended consequences of
reducing quality of, and access to, care for patients. Defying the
spirit of transparent and open government, this bidding program was
rushed into implementation in the 11th hour of the Bush
administration without regard for the negative impacts it will have
on seniors and home care patients,” wrote AAHomecare President
Tyler Wilson.

But getting that message across will take some effort, observers
said, especially since Congress continues to hear from bureaucrats
who point to competitive bidding as a way to save the government a
substantial amount of money. Congressional Quarterly
reported that on Wednesday, Alice Rivlin, former head of the
Congressional Budget Office and the White House Office of
Management and Budget, urged the Senate Budget Committee to curb
entitlement spending growth by using tools such competitive bidding
for HME. Rivlin said that “with all due respect it was ‘ridiculous’
of lawmakers to halt competitive bidding,” according to the
report.

That prompted Wilson to respond that “it would have been
ridiculous to continue that bidding program, which was a disaster
for patients and providers alike, which is why Congress wisely
reformed and delayed the program. Moreover,” he continued, “the
home medical equipment sector more than paid for the full savings
that the flawed bidding program was projected to have saved through
the 9.5 percent cut that took effect earlier this month. And the
durable medical equipment sector is growing at just 0.75 percent
per year despite growing demand.”

The full text of the association’s letter to Daschle, which was
also distributed to national media outlets, follows:

Dear Secretary-Designate Daschle and Committee
Chairmen:

On behalf of the nation’s providers of home medical
equipment and services, the American Association for Homecare urges
you to rescind the last-minute rule issued by the Centers for
Medicare and Medicaid Services (CMS) regarding the competitive
bidding program.

On January 15, 2009, in the final hours of the Bush
administration, CMS submitted to the Federal Register its interim
final rule on the bidding program for home medical equipment, or
durable medical equipment (DME), expected to take effect on
February 17, 2009. While the issuance of interim final rules is
generally reserved for health care emergencies, this clearly was
not such a case. Instead, the process was corrupted to push through
a Bush Medicare program in the 11th hour of the administration
— defying the spirit of transparent and open
government.

We sincerely appreciate the new Administration’s actions to
suspend and review pending federal rules, as detailed in the White
House Chief of Staff memorandum issued on January 20, 2009. We hope
that you will exercise the option outlined in this memo and review
and rescind this rule, which was rushed into implementation without
regard for the negative impacts the program will have on seniors
and home care patients in America. As it stands, the “competitive”
bidding program will actually reduce competition, along with health
care quality and access to care for patients and seniors.

The bidding program would selectively contract home care
providers based solely on lowest cost, forcing out providers who
utilize high-quality homecare equipment or provide critical patient
services. The quality of, and access to, care for patients will be
threatened due to forced cutbacks in homecare services. These
cutbacks will also increase the length and cost of hospital stays
as the number of home medical equipment providers shrinks.

As you know, Congress delayed the bidding program because it
believed the initial roll-out of the program in 2008 had disastrous
results for the four million patients affected and for the hundreds
of providers, mostly small businesses, that were needlessly
excluded from Medicare as a result of the first round of bidding.
The Medicare Improvements for Patients and Providers Act of 2008
(MIPPA) required that several reforms be incorporated into the
bidding program. MIPPA addressed several near-term concerns with
the program, but thoughtful and deliberate rulemaking by CMS was
clearly anticipated by Congress, given the overwhelming level of
Congressional and stakeholder concern during initial
implementation. Under these circumstances, it would be much more
appropriate for CMS to have published a proposed rule, ensuring
that comments received during the comment period would be taken
into account before any final rule is published.

We strongly disagree with the statement by CMS in the
interim final rule that MIPPA “did not alter fundamental
requirements contained in the competitive bidding program statute
and regulations or revise the methodologies used by us in
calculating payment amounts and selecting suppliers under the
program.” Because Round One of the competitive bidding program was
fraught with procedural and operational flaws, the new rule raises
serious questions about due process, fair selection of providers,
and patient access to quality care. In its rule, CMS has done the
absolute minimum to comply with the statute, which affects health
care for millions of beneficiaries.

Additionally, the home care community has expressed its
interest in working with CMS to review the mechanics of the bidding
program. However, CMS has not capitalized on the only existing
mechanism, the Program Advisory and Oversight Committee (PAOC), to
seek or incorporate feedback. In fact, after MIPPA was passed, CMS
disbanded the PAOC, which was created to provide the agency with
concrete, real-world guidance on the development and implementation
of the bidding program.

We view the bidding program as a bureaucratic,
anti-competitive price-setting system that will have the unintended
consequences of reducing quality of, and access to, care for
patients, as well as competition in this sector by eliminating the
vast majority of qualified homecare providers that currently
compete for patients on the basis of quality and service. This
bidding program is similar to a closed-model HMO and will have the
effect of government-mandated consolidation in the home care
sector.

Home medical equipment and care (durable medical equipment)
is already the most cost-effective slowest-growing portion of
Medicare spending, increasing only 0.75 percent per year according
to the January-February 2009 issue of Health Affairs. That compares
to more than 6 percent annual growth for Medicare spending overall.
Home medical equipment represents only 1.6 percent of the Medicare
budget.

Because this issue has been mischaracterized repeatedly,
it’s worth mentioning that the home medical sector was subjected to
a deep, 9.5 percent reimbursement cut (effective January 1, 2009)
as a part of MIPPA in order to “pay for” the savings the bidding
program has been projected to save. It should also be noted that
our Association recommended an aggressive 13-point anti-fraud
program last year in order to help the federal government prevent
criminals from participating in Medicare. However, the bidding
program, a price-setting mechanism, should not be confused with
anti-fraud measures.

We ask for a review of the rule and rescission of the rule
in order to allow the affected patients and providers the deserved
opportunity to voice their concerns about the program.

Sincerely,

Tyler J. Wilson

President, American Association for Homecare