Washington Action Reverberates at Medtrade Spring
Medtrade Spring attendees expecting a somber show and bleak industry forecast instead were re-energized as industry efforts in Washington, D.C., took
Medtrade Spring attendees expecting a somber show and bleak industry forecast instead were re-energized as industry efforts in Washington, D.C., took a turn for the better earlier this month.
Even as the 4,000 participants — 2,600 of them providers, according to show officials — converged on the Long Beach (Calif.) Convention Center May 6, HME representatives were attending a hearing on Capitol Hill centered on competitive bidding. And that hearing, in which House Ways and Means Health Subcommittee Chairman Pete Stark, D-Calif., said he would try to block the program, led to a follow-up meeting with Stark’s staff to discuss alternatives.
“AAHomecare chairman Alan Landauer is leaving here today for a meeting up on the Hill tomorrow … to discuss options for going in a different direction than competitive bidding,” association President Tyler Wilson told his audience during a May 7 update at the spring trade show.
Speaking before a packed room, Wilson offered a brief summary of the Ways and Means hearing, which included testimony from Kerry Weems, acting CMS administrator — who told the committee “there are no problems” with competitive bidding — and provider Tom Ryan, former AAHomecare chairman and CEO of Farmingdale, N.Y.-based Homecare Concepts, who spoke on the association’s behalf.
After pointed questioning from committee members, Wilson said, the upshot is that “a whole bunch of important people are going to rethink this … We are building up political headwind.”
But getting rid of competitive bidding will take some doing, Wilson said, and it won’t come without a cost.
CMS has already said it expects to save $1 billion annually through the DMEPOS bidding program, so the industry must come up with a way to save that money if the program is eliminated. Based on a Congressional Budget Office estimate of the cost of ending the program, Wilson said that means $6 billion might need to be cut from HME reimbursement over five years unless other alternatives surface.
Wilson quizzed providers on whether they would be willing to take an across-the-board reimbursement cut in return for competitive bidding “going away.”
A five-percent cut got an almost unanimous show of hands. A 10-percent cut drew about an 80 percent showing. At 15 percent, providers started grumbling, but there were still a plentiful number of hands in the air.
Reworking the program, however, did not appear to be acceptable. Audience member Cindy Justice, vice president and general manager for Melbourne, Fla.-based RespiCare of Central Florida, said she could not fathom redoing round one. “It just makes me sick to think about it,” she said.
“We don’t want to have the program retooled if there is a chance of getting the whole thing thrown out,” Wilson said.
He noted the industry is working on multiple fronts to get at least a delay of competitive bidding. Already, two lawsuits have been filed, one in the Dallas CBA and one in Cleveland, and another is in the works. And legislators on both sides of the aisle have sent letters detailing serious problems with the program to Department of Health and Human Services Secretary Michael Leavitt and chairs of key legislative committees.
In addition, AAHomecare is ramping up the industry’s visibility. Before the hearing, the association placed an ad challenging competitive bidding in Roll Call, a popular Capitol Hill newspaper.
Consumer media is also starting to take notice. An article on competitive bidding — in which Stark was quoted as saying he would like to see the program “scrapped” — appeared in the Wall Street Journal on the day the spring expo began, and the Washington Post reported on home oxygen cuts and service issues.
“The stars are beginning to align,” Wilson said.
While the Washington action offered providers a glimmer of hope, Wilson stressed there is much work yet to be done. “You have to craft a solution, get the legislation and the Senate and House together, then decide what vehicle it will move forward on,” he pointed out during the Medtrade Spring session.
To achieve any of that, providers must get involved in the process, he said. “We need our voices to be supported by yours,” Wilson said, urging providers to call or email their legislators to ask for a delay in the bidding program.
News of the action on Capitol Hill buzzed around the halls of the convention center and on the show floor, with many providers saying an across-the-board cut would be better than the 26 percent average savings CMS has said it would gain from competitive bidding.
Even a 15 percent cut would be better, according to Cindy Riemer Wolf, COO for Diabetic Care Services in Eastlake, Ohio. Her company, a national diabetic mail-order business, bid in that category in all 10 CBAs in round one and lost in every market.
“I’m very angry about this,” Wolf said. “We take care of 125,000 people. We’ve been doing this for 11 years.”
Wolf said she resents the providers who won bids because at the 43 percent pricing reduction that resulted in the category, “they have removed the service component from what we do. And all the folks who have won are not our competitors. Our competitors all lost. These people [who won bids] haven’t even done this before.”
She worries that patients will suffer because there will be no one to look out for them. So, while 15 percent would be a tough cut, “we’d swallow it and go,” Wolf said.
So would Jae K. Kim, C. Ped., CDF.
“They drop the fees based upon their research and we will follow,” said Kim, president of Life Med Medical Supplies & Equipment in Los Angeles. “Why do we have to take bidding? This is stupid.”
Mark L. Sangree, vice president and general manager of RespiCare of South Florida in Deerfield Beach, said elimination of round one would be better than its delay or redoing. He could live with the cuts, he said, but the best thing would be “to require accreditation but have a free marketplace.”
In case that doesn’t happen, though, Sangree and his peers at the Long Beach show were actively searching for ideas on how to live without Medicare. Sessions promising suggestions along those lines bulged with attendees, and many vendors reported keen interest in products that are not necessarily covered by the program.
“A lot of people are looking for new revenue,” said Dave Cannon of Adroit Medical Systems in Loudon, Tenn., which offered a continuous low-level heat therapy pump. “They’re looking for new revenue streams.”
Heard at the Show
As usual, attendees at Medtrade Spring were not shy about
sharing their opinions, particularly on any subject related to
competitive bidding.
“Since CMS’ deadline announcements, there has been an increase in activity … for the immediate 70 MSAs where providers have to be accredited by Oct. 31 of this year [for round two of competitive bidding], but there are also a lot of people who have said ‘I just want to get started now so that I’m not under the pinch of trying to get it all done later for the Sept. 30, 2009 deadline.’”
— Susean Nichols, Millennium Management Services, Long Beach, Calif.
“The mood right now in Texas, especially in Houston and Dallas … is panic, because there’s such a large service area with so few providers. [Providers] are just really worried about the feasibility of keeping up quality service. One, with the change in the gas prices, service could be prohibitive when you’re figuring that’s there’s been an almost doubling in gas prices and [those who won bids] are going to be locked into that $140 [oxygen reimbursement] for three years … The second thing is access to patient care. With competitive bidding and so much focus on minimizing the allowables, it’s going to force a lot of people who have been providing excellent, quality care out because they can’t afford to do it.”
— Peggy Miller, On Track, Missouri City, Texas
“There are a lot of people here from the first 10 MSAs that came to get educated on what they can do on life under competitive bidding. Some of the medium-size to larger providers that had unfavorable bid outcomes are here to see what they can do to survive, and that’s why they’ve traveled from Miami and Dallas and Charlotte trying to get an education on how they can move forward.”
— Rob Brant, Accredited Medical Equipment Providers of America, Miami, Fla.
“We will do our best to get accredited and to be involved in competitive bidding if we have to, but then how can we compete with the big folks? It almost seems impossible to do that. That’s a fear in the mind of every small DME business owner.”
— ChiChi Iwuamadi, AmeriCare, Virginia Beach, Va.
“We honestly have not decided whether we will get accredited and continue with Medicare. It is 43 percent of our business, but it’s probably 80 to 85 percent of our workload with all the hoops that Medicare makes you jump through. Do we want to lose that business, or do we want to take the pay cuts that are anywhere from 26 percent [or more]? Is it worth it at that point to basically break even when you can be doing something else to generate income?”
— Darren Tarleton, Mobility Warehouse, Stockbridge, Ga.
“I have become a little more hopeful since the hearing was called. That’s a significant change in the climate, because they don’t hold hearings like the one that happened [May 6] unless they’re serious about changing something. [Rep.] Pete Stark … has been knowledgeable about our industry for years, and if he’s willing to negotiate, we can negotiate.”
— Mike Hamilton, Association Services, Hoover, Ala.
“For diabetic supplies to be cut 45 percent is just unbelievable to me … Some people that won aren’t even doing diabetic supplies at this time, and that’s very difficult to believe. We’ve been doing this for 15 years, and we believe in talking to our customers and helping them out, and now we get somebody [winning a contract] that hasn’t even done this before. It’s very disheartening. We are very concerned for our patients and our company. We’re affected in the 10 MSAs about 20 percent, so we’ll lose all those July 1, [and if they] go to a national bid … that would put us out of business. I just don’t understand how companies can do it for what the allowable is going to be.”
— Dean Hawley, Diabetic Supplies of America, Lake Park, Fla.
New Product Pavilion Awards
Based on attendee votes, the winners were:
Innovation Award: Bridge Medical, for its Telescoping Pivot Grip Portable Grab Bar
Providers Choice Award: Respironics, for its EverFlo Q stationary oxygen concentrator
Merit Award: Dignified Living Ltd., for its Clip & Pull, a dressing aid for pulling up clothes
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