Hobson Steps Up Again

Unfortunately, the legislative reality is, at least for now, that repeal of competitive biding for durable medical equipment is highly unlikely. But that does not mean that we cannot influence CMS administratively, nor does it mean that we cannot lobby Congress for reasonable changes that will impose rationality on a program — that most overwhelmingly agree — will not be in the best interests of the consumers we serve.

Happily, Rep. Dave Hobson, R-Ohio, long-time industry advocate on Capitol Hill and also longtime opponent of competitive bidding, has once again stepped up to the plate. Congressman Hobson is introducing a bill in the House of Representatives that would amend several sections of the Medicare Modernization Act and make a series of changes to its competitive bidding mandate. A Senate companion measure also is in the works.

At press time the bill was in draft form and subject to change, but Rep. Hobson has identified the following provisions to include in the bill:

1. Quality standards The provision would require CMS to implement the “quality standards” provision coincident with competitive bidding. While the law requires CMS to develop and implement “quality standards” (read: mandatory accreditation), the law also allows CMS to delay implementation of the quality standards if necessary. Without a level playing field, and articulated standards and requirements, suppliers cannot rationally calculate bids for products and the related services. Therefore, implementation of quality standards with competitive bidding is necessary to ensure that all bidders meet the same standards.
2. Exempt rural areas from competitive bidding The current law gives CMS the authority to exempt “rural areas and areas with low population density within urban areas that are not competitive, unless there is a significant national market through mail-order for a particular item or service.” This provision would require CMS to exempt rural areas from competitive bidding. It also would define rural areas as metropolitan statistical areas with fewer than 500,000 people.
3. Restore administrative and judicial review The current law for DME competitive bidding strips away all appeal rights, both administrative and judicial, by any affected party. The law specifically precludes administrative or judicial review of the payment amounts, the awarding of contracts, the designation of the geographic bid areas, the phased-in implementation, the selection of items and services to include and the bidding structure and number of contractors selected. This provision would restore administrative and judicial remedies consistent with those currently available to aggrieved parties under the Medicare program.
4. Define significant savings The law currently allows CMS to exempt items and services “for which the application of competitive acquisition is not likely to result in significant savings.” This provision would define the term “significant savings” as being 10 percent. The provision also would require CMS first to demonstrate the probability of achieving “significant savings” before a product or product category could be included in the competitive bidding program.
5. Bid rates in non-bid areas The law allows CMS to adjust payment rates in geographic areas that are not part of a competitive bidding area based on payment amounts in a bid area, effective Jan. 1, 2009. This provision would require CMS to conduct a comparability analysis first before implementing competitive bid rates in any non-bid geographic area.
6. Apply FACA to PAOC The law stripped away applicability of the Federal Advisory Committee Act (FACA) to the Program Advisory and Oversight Committee (PAOC), the group that is charged with advising CMS as it implements competitive bidding. FACA is essentially a “sunshine” law that requires the government to operate advisory committees openly, make meeting records available and allow public participation in the process.
7. Small supplier protection Allow any Medicare Part B supplier that meets the quality standards and submits a bid for an item or service to provide those items and services at the final bid rate.

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].