When the Going Gets Tough

With the Senate’s introduction of the Medicare Durable Medical Equipment Access Act of 2007, we now have measures in both chambers of Congress that enable us to launch a full-fledged grassroots program that involves providers, consumers and other stakeholders. CMS’ July 13 deadline for bid submission has starkly transformed a theoretical future into a short-term reality: April 1, 2008, is the scheduled start date for the competitive bidding program.

Sens. Kent Conrad, D-N.D., and Orrin Hatch, R-Utah, have joined Reps. John Tanner, D-Tenn., and David Hobson, R-Ohio, in leading the charge to get these bills passed into law. They now need our help.

They need consumers, providers, manufacturers and other stakeholders — through letters, phone calls and personal visits — to inform their representatives and senators about the ill-effects of competitive bidding and how these bills — S. 1428 and H.R. 1845 (both with the same title) — would protect consumer access to quality care and protect home care providers, particularly small business.

The bills would:

• Exempt smaller, rural areas (MSAs with populations under 500,000);
• Allow all qualified providers to participate at the selected award price (the House and Senate versions of the bill define “qualified” provider differently);
• Restore the due process rights of providers to administrative and judicial review;
• Exempt items and services unless CMS can demonstrate savings of at least 10 percent.

The House bill (H.R. 1845) would also place a moratorium on the competitive bidding program after CMS completes its implementation in the first 10 MSAs; Congress would specifically have to pass a law for it to continue.

H.R. 1845 is consistent with H.R. 2231, a bill that would exempt complex rehabilitation and assistive technology from the competitive bidding program. Both bills recognize that the program will have negative impacts on consumers by limiting their choice of provider and limiting access to high-quality products and services.

What Do You Tell Your Senators and Representatives?

You need to distill the complexities of the CMS bidding program into one sound-bite: Consumers will lose access to quality items by having the provider choice significantly limited to those that submitted the lowest bids.

Start with that in your letter or visit, and then explain further by using these talking points:

These Bills Would Protect Beneficiaries

• The Medicare Modernization Act requires HHS to include quality standards in the competitive bidding process, but it also allows HHS to waive application of the standards if it would delay the implementation of competitive bidding. The quality standards are essential to ensuring that beneficiaries are not forced to use the lowest-cost provider without consideration of the quality of the DME items, therapies, and services provided. In fact, CMS is allowing suppliers who are not yet accredited to submit bids. These bills would require the HHS Secretary to ensure suppliers meet the quality standards before submitting bids.
• The MMA allows the Secretary to exempt rural areas and urban areas with low population density from competitive bidding. It is important to ensure that the bid program is not implemented in areas that lack the health care infrastructure to support it. Doing so would penalize beneficiaries in those areas. The bills would require the Secretary to exempt rural areas, including MSAs with fewer than 500,000 people and urban areas with low-population density.
• The MMA created a Program Advisory and Oversight Committee composed of stakeholders to advise the Secretary on the implementation of competitive bidding. However, despite the importance of this committee, the MMA does not apply the Federal Advisory Committee Act to it. The purpose of FACA is to ensure that advice rendered to the executive branch by advisory committees be both objective and accessible to the public. The bills would apply the FACA to the PAOC.

These Bills Would Protect Small Providers

• The MMA allows the Secretary to contract with only as many providers as deemed necessary to meet the demand of an area. Any provider not awarded a contract would be prohibited from participating in Medicare for three years. CMS expects that half of the local — primarily the smallest — providers will not win, which will cause massive numbers of small business bankruptcies. The bills would allow qualified providers that did not receive a contract to continue to provide DME in Medicare at the competitive bid rate.
• Qualified providers would be those that submitted a reasonable bid (a bid below the fee schedule amount) and that are otherwise compliant with Medicare requirements. In the Senate bill, this provision is limited to providers defined to be “small” by the Small Business Administration, or $6 million in revenues or less. The House bill opens this provision to all qualified suppliers, regardless of size.
• The MMA explicitly prohibited administrative or judicial review for competitive bidding of DME. This means that providers do not have legal recourse to appeal the bid amount or contracts. The bills would restore appeal rights for competitive acquisition of DME. These rights exist elsewhere in the Medicare program.
• Under the MMA, HHS can only competitively acquire an item if it believes doing so would result in significant savings to Medicare. It is important for the Secretary to show that the savings from competitive bidding justify constructing a bureaucracy to implement the program. To that end, the bills would require the Secretary to show that competitive bidding would result in savings of at least 10 percent.
• Under the MMA, the Secretary can use competitive bid rates in one MSA to set the reimbursement for another. The bills would require that, before doing so, the Secretary conduct a comparability analysis of the two MSAs. This would help prevent any application of bid rates outside of an MSA that are inappropriate.

Congressional Reauthorization

• The MMA would expand the competitive bid program to include an additional 70 MSAs in 2009 and additional MSAs in 2010 and thereafter.

Under the House bill, the Secretary would have to conduct an analysis of the initial 10 MSAs after competitive bidding has been fully implemented there. The Secretary also would be prohibited from expanding the program to additional MSAs or applying competitive bid rates to non-bid MSAs beyond the initial 10 unless authorized by Congress.

Don’t delay! Write your representative and senators and urge them to sign on as a cosponsor to these important bills, H.R. 1845 and S. 1428.

A specialist in health care legislation, regulations and government relations, Cara C. Bachenheimer is vice president, government relations, for Invacare Corp., Elyria, Ohio. Bachenheimer previously worked at the law firm of Epstein, Becker & Green in Washington, D.C., and at the American Association for Homecare and the Health Industry Distributors Association. You can reach her by phone at 440/329-6226 or by e-mail at [email protected].