Round 1 Briefing Is ‘More Lipstick on a Pig’

WASHINGTON — CMS took an airbrushed picture of Round 1 competitive bidding to
Capitol Hill last week, but the distorted image could end up
working in the HME sector’s favor, some stakeholders believe.

At a congressional staff briefing on the five-month-old program
May 10, CMS representatives said it was moving along more smoothly
than anticipated with “virtually no complaints.” Repeating numbers
relayed at a Program Advisory and Oversight Committee meeting
in early April, agency officials said of 54,000 “inquiries” to the
Medicare hotline, only 43 were complaints about bidding.

It was a case of “more lipstick on a pig,” according to the
American Association for Homecare.

“Senate staff pressed CMS to describe the difference between a
complaint and an inquiry but the agency was unable to give a
suitable answer,” the association reported in its May 11
newsletter.

“CMS is misrepresenting and misinforming Congress,” added John
Gallagher, vice president of government relations for Waterloo,
Iowa-based VGM Group. “The more they do that, the more I think it
[works] for our side.”

According to VGM sources, CMS told congressional staffers that
clinical outcome concerns never materialized, that 97 percent of
suppliers had experience in their localities and 76 percent of
suppliers had experience in the specific DME service in the
locality.

Such assertions defy reality, Gallagher said.

Industry providers have also disputed those figures since Round
1 contract suppliers were announced in November 2010.

“In the Pittsburgh CBA, we have a substantial number of
contractors from other states — Ohio, California, Tennessee,
Florida, etc.,” Georgie Blackburn, vice president of government
relations for bid winner Blackburn’s Pharmacy in Tarentum, Pa.,
told HomeCare in an interview
following the announcement. “It’s incredible that so many
contractors are from outside our state and/or have never supplied
the product for which they won an award.”

Various organizations have also reported cases of Medicare
patients in bidding areas being unable to find a provider to supply
or fix equipment. Gallagher noted specifically the story of a
Florida
woman who battled for a month to find someone to service her
oxygen concentrator.

Gallagher said he did not believe most in Congress are buying
CMS’ rosy picture of competitive bidding. While legislators who
support the bid program will likely accept it, others are
skeptical, he said.

According to VGM, officials at the Capitol Hill briefing also
said that CMS:

• Will survey beneficiaries in the Round 1 CBAs this summer to
  ascertain changes in the level of service and quality of
  equipment.
• Is evaluating ways to improve bona fide bid rules and analyzing
  mean bid vs. pivotal bid methodology. The latter would mean fewer
  suppliers and higher costs, the agency warned.
• Is also evaluating “a more realistic estimate” of overall
  supplier capacity, which would further limit supplier
  participation.
• Did not know how many contract winners have gone out of
  business and is not tracking that data.

Last week, VGM, AAHomecare and other industry associations urged
providers to press their legislators for support of H.R. 1041 to
repeal competitive bidding and to create a companion bill in the
Senate. As of Friday, 97 cosponsors had signed on to the measure in
the House.

“While concerns about the program continue to grow in the
Senate, more work is needed,” AAHomecare told members in a May 13
update. “It is imperative that you contact both of your U.S.
senators to describe the problems with the Medicare bidding program
for home medical equipment and services. Let your senators know the
devastating effect that ‘suicide bidding’ will have on you and your
patients.”

He thinks “there is a very good chance” for a Senate bill,
Gallagher said, noting that Friday’s report from the Medicare
trustees underscores the need for a particularly well-run agency to
handle Medicare. According to the report, the Medicare Part A trust
fund will run out of money in 2024, five years earlier than
anticipated. (See “Medicare
Trust Fund Kaput in 2024.”)

“CMS is woefully inefficient,” Gallagher said. “That needs to be
addressed. The more that builds, the more they lose credibility,
the more we have a chance …

“I think we just continue to highlight the absurdity of CMS’
claims,” he said. “You talk with members of Congress, they all want
to dismantle CMS and start over. It’s nonfunctioning. Blow it up
and start over.”

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