Competitive Bidding and Bare-Knuckle Politics: Race to H.R. 3790

WASHINGTON — Leaders at the American Association for
Homecare’s Legislative Conference March 2 told attendees that
getting the industry’s message out on competitive bidding was up to
them.

“You have a real opportunity over the next couple of days to
make a difference,” said Tyler Wilson, association president. “It
wouldn’t be an overstatement to say that health care is at a
crossroads  …

“There really are fundamental issues being discussed and
profound philosophical differences being voiced. It’s also fair to
say there are bare-knuckle politics being played up and down
Pennsylvania Avenue. So almost everything related to health care is
in play, and that means that nearly everything is up for
debate.

“And that,” Wilson continued, “is the good news and perhaps the
bad news for the home care community.”

The association sent a two-page summary sheet to Capitol Hill
offices outlining HME’s issues — ahead of 300 lobbying visits
scheduled this week with federal lawmakers and their staffs —
chief among them support for H.R. 3790 to repeal the bidding
program.

But according to AAHomecare’s Walt Gorski, vice president of
government affairs, “An issue paper does not sell support of H.R.
3790 … That’s your job.”

And a Big Job It Is

The bill is gaining traction, but now that health care reform is
back in play, Wilson said, “every day that goes by” makes the push
for H.R. 3790 more critical if stakeholders hope to get its
language attached to reform legislation.

CMS is also looking at the clock. With the rebid window for
Round 1 closed, the ramp-up for Round 2, mandated to begin next
year, will be discussed at a March 17 meeting of the Program
Advisory and Oversight Committee, said the agency’s Jonathan
Blum.

Blum, director of CMS’ Center for Medicare Management, staunchly
defended the program at a conference lunch on Tuesday.

“We have two problems with the DME side of the Medicare
program,” Blum said, noting first “a payment policy that is based
upon a statutory formula that we know is not the best possible
price for our beneficiaries and for taxpayers. We also have a
tremendous supply of providers … the best way to address both
challenges is through competitive bidding.

“To our minds,” Blum continued, “no other program but
competitive bidding can ensure that we have the best possible price
and also the highest quality providers at the same time.”

He described another plus for the program as a fraud deterrent
of sorts. When prices are higher than the market bears, Blum said,
“it tends to attract a lot of interest.” More accurate pricing
removes “the incentives for fraud.”

CMS has learned from the lessons of Round 1, Blum said, but “I’m
not here to change your mind” about the program, he told the
audience of providers and manufacturers — and he didn’t.

John Shirvinsky, executive director of the Pennsylvania
Association of Medical Suppliers summed up their sentiments: “No
matter how hard you guys work, it doesn’t change the fact that
we’re dealing with a fundamentally flawed program that’s been put
into your hands …

“This industry is not going to be able to survive that,” he told
Blum. “There will be business closings. On average, we depend on
Medicare for about 40 percent of our business just because of the
nature of what we do. This is going to hurt our customers. They are
going to lose their local suppliers … the neighborhood
wheelchair supplier, the neighborhood oxygen supplier is going to
disappear.”

Based on Blum’s response, however, the program’s parameters
could have been even worse. Some other bidding systems, he noted,
are set up as “winner takes all,” where only “one contractor gets
the prize” instead of allowing multiple bid winners.

“We know the changes are controversial. We know the changes are
disruptive. We know the changes have tremendous impact to our
beneficiaries … but this is a very high priority for the
agency,” Blum said.

What’s happening in health reform, he continued, “is asking the
agency to act in a new way, to think about a more competitive
market-based payment system and move away from a traditional
fee-for-service fee schedule.”

Competitive bidding, he said, is the “first test in the agency’s
ability to implement the “much more comprehensive, wide-sweeping
changes” that Congress is looking for.

Following the lunch session, AAHomecare’s Gorski quipped that
Blum’s comments were “really motivational” for providers tasked
with getting legislators to stop the bidding program.

Those who traveled to Washington for the push on H.R. 3790
believe they are up to the challenge.

Said Phil Stone of Peoples Home Medical in Covington, Ga.,
“That’s exactly why I’m here.”

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