Rep. Meek: Repeal Competitive Bidding

Rep. Kendrick Meek, D-Fla., introduced a bill this afternoon to repeal DMEPOS competitive bidding, offering a series of minor cuts and a Consumer Price Index freeze as a “pay for” instead. The provisions would replace the bidding process currently mandated by Congress.

“I think the chances of passing are going to be very good,” said Barry Johnson, president of the Texas Alliance for Home Care Services (TAHCS). “We have been meeting with folks on the [House Ways and Means Committee], and we have found very little resistance to a bill that accomplishes the same thing that the competitive bidding process was designed to accomplish, but without all the flaws and problems — and without restricting patient access to care.”

According to Sean Schwinghammer, an advisor to the Accredited Medical Equipment Providers of America (AMEPA), H.R. 3790 is budget-neutral, calling for cuts in all DME — except group 3 complex rehab — of 0.25 percent for three years and a single 0.5 percent cut two years later, combined with a CPI freeze.

“AAHomecare reviewed the actuary figures, which, when added to the 9.5 percent cut we took in January 2009, is equal to 19.5 percent,” Schwinghammer said in a release issued by AMEPA. “That’s the same savings projected from the demonstration projects, which the program was based on.”

In a letter to members of Congress asking for support of his legislation, Meek wrote:

“The Medicare competitive bid program for durable medical equipment and services (Title XVIII of the Social Security Act) began in July 2008 as a well-intentioned effort to improve quality of service and eliminate excess costs in Medicare. However there was nothing competitive about the misconceived program. There are serious flaws in the bidding process which produced few competitors, fewer home care services and a decrease in the quality health care [for] those with disabilities who require the right care and equipment in order to live.

“Congress delayed the program only two weeks after it began, in a clear acknowledgement that the bidding process was deeply flawed and needed fixing. For example, contracts were awarded to suppliers without a physical location in or near the bid area and who were unable to provide the equipment or services to patients; unlicensed providers (in violation of state standards); and fly-by-night operations with no experience in providing bid items.

“However, in the 14 months since the competitive bidding program has been delayed, no significant improvements have been made to the process. In October 2009, the program is due to begin again. We cannot allow it to restart.”

CMS has set Oct. 21 as the target date for opening the Round 1 rebid. In the 2008 Round 1, reimbursement reductions averaged 26 percent. According to a recent HomeCare survey in conjunction with global investment firm William Blair and Co., 26 percent of participating providers believe a winning bid this time around would have to be at least 20 percent or more under current allowables; another 23 percent think a successful bid would have to be at least 15 percent lower.

The new bill has 16 initial cosponsors, including at least one representing every Round 1 competitive bidding area:

Jason Altmire, D-Pa.
John Boccieri, D-Ohio
Jo Ann Emerson, R-Mo.
Sam Farr, D-Calif.
Marcia Fudge, D-Ohio
Alcee Hastings, D-Fla.
Eddie Bernice Johnson, D-Texas
Ron Klein, D-Fla.
Dan Maffei, D-N.Y.
John Murtha, D-Pa.
Tim Ryan, D-Ohio
Heath Shuler, D-N.C.
Glenn Thompson, R-Pa.
Patrick Tiberi, R-Ohio
Debbie Wasserman Schultz, D-Fla.
Robert Wexler, D-Fla.

TACHS’ Johnson hopes to see at least 100 cosponsors. “That would certainly be dramatic,” he said. “Bills that have 100 cosponsors generally don’t fail.”

According to Roger Ribas, president of FAHCS, “Meek would have filed this bill alone if it was not for the hard work and dedication of the state associations represented in Round 1 and beyond. AAHomecare has been working with the state leaders for months now, and tremendous thanks goes to AAHomecare, CAMPS, MAMES, NCAMES, NYMEP, OAMES, PAMS and TAHCS for getting those additional cosponsors.

“With the expansion of Round 2 MSAs,” Ribas continued, “the threat of Medicare implementing Round 1 prices nationwide and the examples of other insurance carriers mimicking competitive bid prices, this is a bill that the entire industry can stand behind. Even though providers are working harder than ever to just survive and preparing to place their rebid in a few weeks, it will take the efforts from everyone, regardless of where they are located, to enact this into law.”

According to a bill summary from AAHomecare:

• The pay-for competitive bidding repeal legislation would eliminate the CPI-U updates for all DME in 2010, 2011, and 2012 (i.e., no update in these years). Then, the DME fee schedule would be reduced by 0.25 percentage points in each of these three years.
• Complex rehabilitative power wheelchairs recognized by the Secretary as classified within group 3 or higher would receive a CPI-U update in 2010, 2011 and 2012.
• In 2013, all DME would receive a CPI-U update.
• In 2014, all DME would receive a CPI-U update. Complex rehabilitative power wheelchairs recognized by the Secretary as classified within group 3 or higher would receive a CPI-U update plus 2 percentage points. All other DME would receive the CPI-U only with no additional 2 percentage point increase.
• In 2015, complex rehabilitative power wheelchairs recognized by the Secretary as classified within group 3 or higher would receive a CPI-U update. All other DME would receive no CPI-U update as well as a 0.5 percentage point reduction in fee schedule payments.
• In 2016 and subsequent years, all DME would receive the CPI-U update annually.

“Remember,” said Rob Brant, president of AMEPA, and a constituent of Rep. Meek, “you will have little chance of winning the bid, and no chance to survive it. If you actually took the time to get a surety bond this year, then take a few minutes to contact your legislator about repealing competitive bidding.”

To contact your representatives, call the Capitol switchboard at 202/224-3121. Ask your representative to be a sponsor of H.R. 3790 and have him or her call Peter Gwynn-Sackson at 202/225-4506 in Meek’s office or e-mail him at [email protected].

View H.R. 3790, Meek’s complete letter to colleagues and talking points about the bill on the VGM Web site.

View more competitive bidding stories.