CMS Calls for PAOC Nominees

BALTIMORE–Earlier this afternoon, the Centers for Medicare and Medicaid Services issued the following notice soliciting nominees for panel members to serve on the Program Advisory and Oversight Committee, which will make recommendations on issues related to the next phase of national competitive bidding.

Formed under the Medicare Modernization Act to advise CMS on implementing competitive bidding, the PAOC held its first meeting in 2004 and had been scheduled to meet periodically through 2009. But through all of its meetings up to this point, many of the committee’s members have argued the group is ill-named: Some say they’re playing a purely “advisory” role and have no “oversight” over CMS.

For a report on the most recent meeting of the PAOC, held June 16, see HomeCare Monday, June 23.

Following in its entirety is today’s statement from CMS:

The Centers for Medicare & Medicaid Services (CMS) is soliciting nominations for individuals to serve on the Program Advisory and Oversight Committee (PAOC) that advises CMS on various issues relating to the competitive bidding program for durable medical equipment, prosthetics, orthotics and supplies (DMEPOS).

“Medicare is committed to making sure that beneficiaries and taxpayers get the highest value for their health care dollars, and evidence from pilot projects has proven that competitive bidding for certain types of DMEPOS items and services can be a major tool in achieving that goal,” said CMS Acting Administrator Kerry Weems. “We look forward to working with the new PAOC members to bring people with Medicare higher quality durable medical equipment items and services at lower prices.”

Because the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) delayed implementation of and made certain changes to the competitive bidding program, and extended the PAOC for two years through December 31, 2011, CMS is ending the term of service for current PAOC members.

The PAOC will be comprised of 10 and 12 members from the following broad categories:

• Beneficiary/consumer representatives;
• Physicians and other practitioners;
• Suppliers;
• Professional standards organizations;
• Financial standards specialists (that is, economist/certified public accountant); and
• Association representatives.

CMS may consider nominees for additional categories if it finds that their expertise will help to ensure the successful implementation of the program.

Competitive bidding brings the benefits of market competition to the fee-for-service Medicare program, including lower costs for both the beneficiary and the taxpayer, while promoting beneficiary access to high quality items and services. In the absence of competitive bidding, Medicare pays for DMEPOS under fee schedules derived from historical charges adjusted for inflation, even though the same items may be available at lower prices in the market. A key element of the competitive bidding program is that only accredited suppliers that meet financial and quality standards may participate in the program.

Part B of Medicare provides coverage and payment for medical equipment used by beneficiaries living in their homes. These items range from simple canes to hospital beds and oxygen equipment and supplies. Medicare generally pays 80 percent of the fee schedule amount for an item and related supplies or services, and the beneficiary is responsible for the remaining 20 percent.

The PAOC was initially established in 2004, as required by the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA), to advise CMS on the design and implementation of a competitive bidding program for DMEPOS that would build on the successes of two pilot projects that had shown that competitive bidding could reduce prices of DMEPOS without adversely affecting beneficiary access or compromising quality.

According to the MMA, the goals and responsibilities of the PAOC included:

• Implementing the program;
• Establishing financial standards, taking into account the needs of small providers;
• Establishing requirements for collection of data for the efficient management of the program;
• Developing proposals for efficient interaction among manufacturers, providers of services, suppliers, and individuals; and
• Establishing quality standards.

“The Program Advisory and Oversight Committee has provided invaluable assistance to CMS in developing the broad framework for the DMEPOS competitive bidding program,” said Weems. “As we move forward and implement the new requirements in the law we expect the new PAOC members to offer important insight based on their real world experience.”

Nominations are due to CMS by November 3, 2008. For more information, see the CMS Web site at: cms.hhs.gov/center/dme.asp, scroll down to “Competitive Bidding,” then click “PAOC” on the left side for an overview and recent announcements.