A Thin Silver Lining

If you have digested CMS’ proposed regulation on competitive bidding, I can only assume you had the same reaction I did if you persevered through the entire document. “Maximize potential savings” seems to be the most oft-used phrase throughout; each proposed detail is designed to elicit the lowest possible bid for whatever items end up being included.

Despite the negatives that the proposed rule presents, there is one thin silver lining: the proposal adds fuel to the fire we need to get Congress to pass the Hobson-Tanner “Medicare Durable Medical Equipment Access Act,” or H.R. 3559, the bill pending in the House of Representatives that would require CMS to rationalize many of the competitive bidding implementation issues.

As you write your members of Congress or meet with them to discuss the proposed rule, be sure to explain the following points, and explain how H.R. 3559 would go a long way toward fixing many of its ills.

• CMS has explicitly rejected or ignored many of the recommendations of the Program Advisory and Oversight Committee that was established by Congress to advise CMS on its implementation of the bidding program. If CMS is to reject PAOC recommendations, it needs to provide that explanation as part of the proposed rule.
• For example, the PAOC strongly recommended that the first step in evaluating suppliers and bids is for CMS to determine whether all the suppliers submitting bids are in compliance with all the requirements — Medicare supplier standards, Medicare quality standards (accredited by an approved accreditation organization) and CMS financial standards. CMS does not identify at what point it will conduct this analysis; rather, in the proposed rule preamble, CMS states it would be too burdensome to conduct this analysis on all the suppliers submitting bids. If CMS allows bids from suppliers not meeting the standards, then all subsequent steps of calculating pivotal bids, bid amounts, etc., will be fundamentally tainted because those calculations will include bids based on numbers that could not have included complete compliance costs.
• CMS should be required to disclose the specific geographic areas and products that will be selected in the bidding program. Instead, CMS plans not to reveal that critical information until it releases the Request for Bids.
• CMS should be required to publish the quality standards to inject better due process procedures, including comments and CMS response to comments. Further, other Medicare provider requirements are typically established by regulation; why should DME suppliers be subject to standards that are developed in a less formal, less accountable method?
• While the legislative language requires CMS to provide opportunities for small suppliers to participate in the bidding program, the proposed rule provides very little concrete opportunity. CMS defines small suppliers as those of $6 million and under, but nowhere in the rule does it explain any advantage or opportunity unique to small suppliers. For example, any size supplier can enter into a network with other suppliers.
• Regarding rebates, CMS should not be allowed to circumvent the law that prohibits Medicare providers/suppliers from offering inducements to beneficiaries. The proposal does not explain CMS’ rationale for its apparent conclusion that the government can, on behalf of a supplier, advertise/communicate to beneficiaries financial discounts they would be able to receive if they get items and services from one supplier or another. This practice is plainly illegal under current law if the supplier does it himself.
• CMS plans on requiring winning suppliers to take on the business of providing products and services to beneficiaries in need of oxygen and capped-rental items in mid-stream if the pre-existing (losing) supplier no longer wishes to service those beneficiaries. Bidders will be confronted with the seemingly impossible task of incorporating those additional, and unknowable, costs into their bids.

Talk to your members of Congress about this rule and the direction CMS is heading, and ask them to sign on as a co-sponsor to H.R. 3559. And, remember to send your specific comments about the proposed rule to CMS by June 30.

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].