IFR Clears Way for Round One Do-Over

WASHINGTON — Ignoring pleas from scores of legislators, consumer organizations and HME associations representing thousands of home medical equipment providers, CMS refused last month to rescind the interim final rule for DMEPOS competitive bidding. The IFR, which requires a rebid of Round One in 2009, went into effect Saturday, April 18.

“Based upon its review and on the need to ensure that CMS is able to meet the statutory deadlines contained in [the Medicare Improvements for Patients and Providers Act of 2008], the administration has concluded that the effective date should not be further delayed,” CMS said in a statement.

The decision to forge ahead in spite of numerous letters from federal lawmakers calling for the rule to be rescinded surprised some industry stakeholders. A bipartisan letter on the rule sent to HHS, CMS and the Obama administration, contained the signatures of 84 members of Congress. In total, some 100 senators and representatives weighed in on the rule.

“I really am disappointed. I thought that, at the minimum, they would delay the program,” said Seth Johnson, vice president of government affairs for Pride Mobility Products, Exeter, Pa. “I am quite confident that the CMS statement is not going to be well received by the members of Congress [who called for the IFR to be rescinded].”

Tyler J. Wilson, president of the American Association for Homecare, also said CMS’ decision was unexpected. “Given the problems highlighted in recent months and the congressional concerns, we are surprised by the decision to move forward,” he said.

Industry Fight Continues

Since issuing the IFR Jan. 16, CMS has been inundated with individual and collective letters from members of Congress about the rule. Among serious problems, they said, the IFR does not adequately address the issues that compelled Congress to halt Round One of the bidding program two weeks after its implementation last July.

“They’ve made absolutely no changes from last year, and that doesn’t sit well with people,” said Cara Bachenheimer, senior vice president of government relations for Elyria, Ohio-based Invacare Corp.

But even with implementation of the IFR, Bachenheimer said, “I don’t think this is the end.” She said the industry has an opportunity to convince the Obama administration that, at the least, the IFR is fundamentally flawed and should be tabled. And there are numerous arguments for doing so, she said.

For example, Bachenheimer pointed out that the administration has already floated the idea of competitive bidding for Medicare Advantage plans. While there aren’t many details as to how that might be accomplished, there are two that could be helpful to the HME industry, she said.

“One is that any willing provider can participate,” Bachenheimer explained, contrasting that with the DMEPOS bidding model that could eliminate as many as 90 percent of the providers in a bidding area.

Another detail in the industry’s favor, Bachenheimer said, is looking at the way bids are calculated. For Medicare Advantage competitive bidding, the bids would be calculated based on the average of all submitted bids rather than on the complicated DMEPOS formula.

“The ‘any willing provider’ is by far the more important of the two,” Bachenheimer said, but both comparisons carry weight in an argument against the IFR.

Johnson agreed the any-willing-provider card could make a strong play in the current economy because the IFR would drive thousands of providers out of business. “Congress is saying that they want to do everything they can to protect small business,” he said, “and on the other hand, the administration is going forward with these projects that … are counter-intuitive to those overall goals.”

In a letter to then-HHS Acting Secretary Charles E. Johnson, Rep. Glenn Thompson, R-Pa., echoed that contention. “In this time of economic uncertainty, the last thing government should be doing is creating regulations that will adversely affect small businesses and remove real competition from the marketplace,” he wrote.

So What Now?

Even as CMS rolled out its statement, the industry was moving ahead.

“I think the next play for the industry … is to build on the significant support that we have been able to [muster],” said Johnson. “We need to continue to build support within Congress and continue to convey the message that competitive bidding must be stopped.”

AAHomecare has convened a task force to discuss options and has hired a Washington health care consulting firm to develop several cost estimates for eliminating the bidding program.

There are several tracks the industry can follow, according to Michael Reinemer, AAHomecare’s vice president, communications and policy. “One is to work with Congress and with the HME community to figure out whether we can eliminate the program. The sticking point there would be how much would it cost in a pay-as-you-go environment,” he said.

“The second would be to work with the new appointees at HHS … to take a hard look at this rule and see what we can do in addressing the problems through that channel,” Reinemer continued. “And on another track, the Program Advisory and Oversight Committee will reconvene, so there will be an opportunity there to … see if all the concerns are thoroughly addressed.”

Last fall, CMS unexpectedly ended the term of the first PAOC, set up to advise the agency on the implementation of competitive bidding, then formed a new committee in January. The first meeting of the new PAOC has been set for June 4.

“Because of the expertise represented on the PAOC, it should be an influential voice in shaping the bidding program,” said AAHomecare’s Wilson. “We hope that CMS and the Obama administration will listen to the advice and suggestions of the PAOC.”

Here We Go Again

Meanwhile, VGM Group, Waterloo, Iowa, has requested that Rep. Bruce Braley, D-Iowa, who supports a delay in competitive bidding, work with House Energy and Commerce Health Subcommittee Chair Rep. Frank Pallone, D-N.J., to include language delaying bidding in his markup for the health care reform package. (Congressional committees use the markup process for debating, amending or rewriting proposed legislation.)

Braley’s office said the congressman had been in contact with Rep. Heath Shuler, D-N.C., regarding possible legislation to stop the bid program. Shuler, chair of the House Small Business Subcommittee on Rural Development, Entrepreneurship and Trade, held a hearing in February on the effects competitive bidding would have on small business, and has called for its elimination altogether.

At press time, advocates had also called on newly sworn in HHS Secretary Kathleen Sebelius to review the bidding program before its re-start.

In its statement on moving ahead with the IFR, CMS said further guidance would be issued in the coming weeks on the new Round One timeline and requirements for bidding, before what insiders believe will be a 2010 launch date.

Rob Brant, president of the Accredited Medical Equipment Providers of America, whose members went to court over bid disqualification in Round One, said he is ready. “I am fully prepared for Medicare to begin rolling out timetables for the rebid while they explain that they are doing their jobs as mandated by Congress,” said Brant, who owns North Miami Beach-based City Medical Services.

“At that point, the industry will have to pull together again and request help for legislators to repeal the program based on the recent cuts in reimbursement, combined with increased quality standards with mandatory accreditation and surety bonds.”

So, déjà vu all over again? Reinemer isn’t so sure.

“I think because there are new faces, a new administration and a new Congress, there are fresh ears,” he said. “This is a new ball game to a certain extent.

“Part of our job,” he added, “is to remind people that … we’re part of the continuum of care that takes care of seniors and those with disabilities and keeps them out of the hospital. We’re part of the solution for Medicare. And that’s the message we have to relentlessly remind people about.”