Bid Rates Coming Up, Time to ‘Double Down’ on H.R. 3790

ATLANTA — With a reported June 25 release date for Round 1
prices, the road to elimination of competitive bidding could get
tougher before it gets easier, stakeholders said last week.

The American Association for Homecare said Thursday it had
learned that CMS plans to release
the single-payment amounts for the Round 1 rebid June 25 and
would mail contract offers to qualified providers. Contract winners
are scheduled to be announced in September.

HME providers have been hammering away at gaining congressional
support for repeal of the bidding program. But announcing the
single-payment rates could be a boon — at least temporarily
— for CMS, some said.

“I think it will be a short-term plus for CMS because it is
going to show that there are additional savings that can be
achieved through competitive bidding,” said Seth Johnson, vice
president of government affairs for Exeter, Pa.-based Pride
Mobility Products.

His view was shared by Inside Health Policy, a
regulatory newsletter that also reported the release date for the
bid rates. “By hitting the June 25 date, CMS could claim savings
for the program before lawmakers leave for the July 4 recess,” the
newsletter said.

However, Walt Gorski, vice president of government relations for
AAHomecare, pointed out there could also be opportunities. “We will
be able to have a clearer idea of how the program will impact
providers as well as beneficiaries, and we will be working to make
that case clear to the public and to Congress,” he said.

Johnson said the industry would gain more ammunition when the
contract winners are revealed in September. “That’s going to
highlight the flaws of the program,” he said. “Once we had that
[data] back in 2008, that was really the pivotal information that
generated the support to get the delay [of Round 1]. I really view
that as the most important piece of information.”

Johnson said he believes it is “very premature” for CMS to
reveal the bid rates without having signed contracts. “CMS could be
in a situation where they announce the rates, then realize they
don’t have enough providers to meet the capacity,” he said.

As Inside Health Policy reported: “It’s likely that
some suppliers who bid higher than the single-bid amount will be
offered contracts because of the way the single- payment amounts
are calculated. This will put companies in a difficult position
because they must decide to either supply equipment at a price they
have determined they cannot meet or be excluded from the program
for three years.”

In addition to the industry, the Congressional Budget Office
will also be interested in the new rates. Johnson said the CBO will
have to factor the bid rates into its overall score for H.R. 3790,
the bill that would eliminate competitive bidding and determine the
industry’s “pay-for.” Providers will need to find a pay-for —
a way to capture the same savings if the plan is eliminated as CMS
would have gained through competitive bidding.

“We are not sure how significant an impact there will be,”
Johnson said. “CMS at this point is holding all the cards. They
have the bids, they have the bid rates, they know who has qualified
and who has not.”

But that doesn’t at all mean the industry holds a losing hand.
Almost every day last week, new legislators signed on as cosponsors
to H.R. 3790, the bill that would eliminate the bid. The newest
signers — Reps. Glenn C. Nye, D-Va.; Mark S. Critz, D-Pa.;
Jeff Fortenberry, R-Neb.; Kurt Schrader, D-Ore.; and Marion Berry,
D-Ark. — brought the total number to 247 as of Friday.

“There’s no magic number with respect to cosponsors,” said
Gorski. “But it is impressive because not many bills have more than
200 cosponsors. As we keep racking up numbers, more people continue
to notice … It is very important that we not slow the
momentum.”

The key issue, he said, “is being able to find a legislative
vehicle that the [bill] could be made part of.”

Johnson said while the industry must continue to win supporters
for H.R. 3790, it also must “double down” on efforts to get a
companion bill in the Senate. “That’s really where the industry
needs to focus its efforts at this point in time,” he said. “I
think it is absolutely critical.”

An unknown in all this is the impact of a hearing scheduled by
Rep. Frank Pallone, D-N.J., chair of the Energy and Commerce
Subcommittee on Health, on July 26, a full month after the bid
rates are expected to be released.

“Clearly there are some positives that could come from that
hearing, but it depends largely on how the hearing is constructed,”
said Johnson. He said that if the hearing functions as a forum,
featuring a panel from CMS, a panel from the industry and a panel
from others such as beneficiaries, it could allow HME stakeholders
to lay out the program’s potential for devastating effects on both
providers and beneficiaries.

But he also believes the hearing would be much more informative
if it were held after the bid winners are announced in
September.

“Once the contract winners are announced, we will have much more
information as an industry on whether they have enough providers in
certain competitive bidding areas to meet the estimated capacity.
We really need that additional information in order to make the
strongest case we can as to why competitive bidding must be
repealed,” he said.

For his part, Gorski said it is important to understand that the
hearing is tentative.

“We’re not entirely sure if that hearing is going to take
place,” he said. If it does, however, “we will be prepared to make
the case that competitive bidding needs to be replaced with [H.R.
3790].”

On yet another front, the industry continues its wait to see
what will happen with a lawsuit filed in May against CMS by the
Texas Alliance for Home Care Services. The lawsuit challenges CMS
on its refusal to reveal financial standards that bidders must
adhere to in order to win a competitive bidding contract.

“The next big date is mid-July when the government replies to
our complaint,” said Jim Tozzi of the Center for Regulatory
Effectiveness, whose legal arm is acting as attorney for the
plaintiffs.

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