CMS Briefs Congress on NCB, Disses DME

WASHINGTON–On Tuesday, CMS held a congressional briefing on
national competitive bidding. According to a report from the
American Association for Homecare, senior CMS officials outlined
the agency’s work on the program and summarized efforts to expand
bidding to another 70 areas. But they also “slammed the industry as
a hotbed of fraud.”

From AAHomecare’s report:

During the briefing, CMS staff claimed that DME fraud is the
largest area of fraud in the Medicare program, the biggest loss to
the program and the biggest vulnerability in the program.

However, CMS staff did not describe their agency’s
accountability for failing to prevent criminals from obtaining
Medicare supplier numbers.

Nor did CMS provide the math for how, exactly, the DME sector,
about 1.7 percent of Medicare spending, could account for the
largest amount of fraud in the entire Medicare program, which
spends more than $400 billion per year. The most recent National
Health Expenditure data from CMS show that durable medical
equipment is the slowest growing sector of Medicare, increasing 3.8
percent between 2005 and 2006 (from $6.7 billion to $6.9 billion).
CMS estimates that the total cost of fraud across all sectors of
Medicare is somewhere between $40 billion to $80 billion per year.
So the agency’s own margin of error for calculating Medicare fraud
is many times greater than the total DME spending in Medicare.

In reference to round one of competitive bidding, CMS stated the
10 metropolitan statistical areas (MSAs) were chosen by focusing on
the areas with the highest allowed DME charges. The winning
suppliers for round one will be announced in March. For round two,
CMS says they focused on MSAs with the largest population, which
doesn’t explain why certain MSAs were included and other large MSAs
were not.

Some general comments made by CMS staff during the briefing and
in response to questions are summarized below:

–CMS will release ZIP codes and other information that will be
included in each competitive bidding area (CBA) sometime later this
spring. A detailed timeline for round two will be announced in the
next four to six weeks.

–According to CMS staff, there is no product category for mail
order diabetic supplies in round two because CMS is planning on
having a national mail order diabetic program in the near future,
which they are hoping can begin in 2010.

–On the topic of competitive bidding for complex rehab power
wheelchairs, CMS staff acknowledged that it does require more of a
service component than some of the other product categories, but
claimed it is not very different from other areas of DME. They
noted that suppliers should be submitting bids that include the
costs of services and customization.

–For round two, CMS says a number of refinements have been made
to the bidding process designed to decrease the burden on bidders,
including an updated bid submission system. Bid submission for
round two will require suppliers to enter less information for
their bids so that the process will take fewer hours. Also, for
many suppliers, there will be almost two-thirds fewer financial
documents required.

–Pre-bidding items for round two will likely commence sometime
this spring, and will include online registration and supplier
education. A 60-day bid submission window will begin sometime this
summer, and contracts for round two suppliers will begin sometime
in the summer of 2009.