AAHomecare Lists Issues With Draft Bid Rule

Washington

The American Association for Homecare has outlined its top concerns with CMS’ Notice of Proposed Rulemaking on competitive bidding, published May 1, as follows:

• Getting it right is more important than rushing implementation. CMS should stagger the bidding in MSAs in 2007 to allow for an orderly roll-out. This would allow CMS to identify problems that occur and correct them before they become widespread. Also, the initial MSAs and products selected should be identified in the final rule. And under the timeline CMS is proposing, small providers will not have time to create networks, which eliminates them as a practical option for small providers that want to participate.
• Have accreditation and standards in place before starting. Only accredited providers should be eligible to submit bids. CMS should not proceed with competitive bidding until this is possible and needs to identify the criteria it will use to name the accrediting bodies now. CMS should grandfather all providers accredited by organizations that meet the criteria it identifies, and should allow additional time for providers to analyze the quality standards in conjunction with the proposed competitive bidding rule. The quality standards will affect the cost of servicing patients and are an integral part of the process.
• Make competitive bidding competitive and sustainable. CMS should not artificially limit bids by disqualifying bids above the current fee schedule amount for an item. Otherwise, the competition is not truly competitive based on market prices. Bid evaluation and the selection of winning bidders should be designed to result in pricing that is rational and sustainable. CMS has not identified any process through which it will seek to determine that the bids are either.
• Don’t make it harder for providers to sell their businesses. The proposal to restrict the acquisition of a winning provider unless CMS needs to replace the supplier’s capacity within the bidding area places an inappropriate restriction on the provider’s property rights. While it is appropriate for CMS to consider the buyer’s quality and financial stability, CMS should not make approval of the acquisition contingent on the need to preserve capacity within the MSA.
• Consider the impact on the patient. CMS cannot rely solely on costs and volume for product selection and should consider issues such as access and medical necessity of beneficiaries who use the items. Competitive bidding should not be a substitute for appropriate medical policy.

Other concerns include the composite score methodology, the rebate program, product selection, the bid process, how CMS will determine the number of suppliers needed to meet demand in bidding areas, what measures will be used to figure out the savings that would result from bidding on an item, gap-filling and networks.

Competitive Bidding Timeline:

June: As of press time, final supplier quality standards had not yet been issued, but they were expected by the end of the month.

Summer: Accreditation organizations apply for deemed status.

Late 2006: CMS is expected to issue its final rule for national competitive bidding and name accreditation organizations.

October 2007: Competitive bidding to begin in 10 MSAs.

View the proposal at www.cms.hhs.gov/CompetitiveAcqforDMEPOS.