Competitive Bidding Committee Finds More Questions than Answers at December Meeting

Baltimore

Which products should be selected and where it should take place are among the issues a committee advising CMS on how to implement DME competitive bidding is contemplating. But after a two-day meeting in early December, the Program Advisory and Oversight Committee (PAOC) came up with more questions than answers.

• Quality Standards Above all else, quality standards remain the keystone for the competitive bidding process, committee members said. “We’re putting the cart before the horse if we don’t do the quality standards first,” said committee member Seth Johnson, director of government affairs for Exeter, Pa.-based Pride Mobility. Under the Medicare Modernization Act, suppliers must meet certain quality standards to participate in competitive bidding, and must receive accreditation to participate in the Medicare program, though exactly what those quality provisions will be and when they will be enforced remains fuzzy. A CMS official said quality standards “are the highest priority for the PAOC,” and will be a recurring item on future meeting agendas. He added that there was also “a lot of discussion and concern about the level of services, but I didn’t hear what services we should be safeguarding. Those are specific details we’ll need from suppliers.” The official said that if providers give details on services required for specific DME, then those services will be incorporated into the bidding contract. “If we find out a supplier is not providing the services, then they’re gone,” he said.
• Which Products? The MMA gives the government the authority to exempt products that would not yield savings under a bidding program, but does not name specific products. So CMS and North Carolina-based contractor Research Triangle Institute, which is advising the agency on the bidding process, began asking questions: Which products should be placed for bid, and how? Should suppliers bid by HCPCS code or by more general product categories? Although no one recommended products that should undergo bidding, some recommended those that shouldn’t — at least not in 2007, meeting attendees said. For example, considering all the changes in Medicare’s wheelchair benefit — reimbursement cuts, the current freeze on Consumer Price Index updates and changes in coding and coverage policy — competitive bidding for the equipment may not yield significant savings, Johnson explained. “The goal of competitive bidding is to assist CMS in providing the greatest savings while ensuring quality and [patient] access.”
• What Cities? MMA states competitive bidding will take place in “10 of the largest” metropolitan statistical areas (MSAs) beginning in 2007 — not “the 10 largest.”

Because the law leaves out specifics of exactly where competitive bidding should start, committee members discussed possible options, including selecting MSAs based on overall population, Medicare population or areas where Medicare spends the most money.

Complicating matters, some of the largest MSAs cross state lines and DMERC lines. Some committee members also suggested excluding or delaying the bidding programs within the largest MSAs, including New York City and Los Angeles, because of the complexity behind serving such densely populated areas.

The agency said it hopes to publish a proposal for competitive bidding in late summer 2005. Although a date had not been set at press time, the PAOC is expected to hold its next meeting early this year.

“We obviously don’t support competitive bidding, but CMS has no choice,” concluded PAOC member Cara Bachenheimer, vice president of government relations at Elyria, Ohio-based Invacare. “Our objective is to make sure CMS understands as many details as possible to make sure [competitive bidding] does not drastically alter the marketplace.”

Unanswered Questions

• What standards should suppliers meet to participate?
• Which products should be placed for bid?
• Should suppliers bid by HCPCS code or general product categories?
• Should MSAs be selected based on overall population, Medicare population or where Medicare spends the most money?
• Should some top MSAs be excluded?