Congressional Staffers Get the Word on Competitive Bidding

WASHINGTON — “If you understand the fundamentals of
competition, it is easy to see that the Medicare competitive bidding
program is anything but competitive … You cannot
eliminate 80 or 90 percent of competitors and expect to arrive at a
competitive outcome,” said John Shirvinsky, executive director of
the Pennsylvania Association of Medical Suppliers.

“The program is already leading to a fast race to the bottom in
terms of quality and access to health care. Services related to
home medical equipment are being reduced or eliminated in response
to artificially low prices caused by market dysfunction,” said
AAHomecare President Tyler Wilson.

“Good providers will find it unprofitable to remain in business.
Home medical equipment provision is so service-intensive, and the
bidding program payment so low due to suicide bidding, that the
entire system may become unsustainable,” said provider Georgie
Blackburn of Tarentum, Pa.-based Blackburn’s.

“It appears [CMS] is wedded to the structure of this program and
advancing it at all costs, rejecting the advice from the Program
Advisory and Oversight Committee, requests for information from
Congress to make the program more transparent and recommendations
from 167 of our nation’s top economists and auction experts,”
said Pride Mobility’s Seth Johnson, vice president of government
affairs.

Those are a few of the points about national competitive bidding
that congressional staffers heard from HME advocates at a March 1
briefing called by Pennsylvania Reps. Glenn Thompson (R) and Jason
Altmire (D). 

The idea was to help make sure legislative staff, especially
freshman members, learn about the bidding program, said
AAHomecare’s Michael Reinemer, vice president, communications and
policy. Stakeholders are hoping to get a new competitive bidding
repeal bill introduced before the association’s Washington
Legislative Conference, which begins March 16.

“The two hosts this morning are key champions on that front,”
Reinemer said Tuesday.

In Congress’ last session, H.R. 3790, which would have repealed
the entire bidding program, gained 259 cosponsors but failed to
make it out of committee. The industry is working to float the
measure again before Round 2 of the program moves forward. The
catch is finding the funds to offset a repeal of the bid system,
which CMS estimates could save $17 billion for Medicare.

No matter what, Wilson told the Capitol Hill staffers that “the
bidding program designed by CMS is faulty, and its administration
has been a lesson in poor planning, arrogance and clumsiness.” He
added that the agency has been “alarmingly dismissive” toward a
number of issues in the two-month run of Round 1, including
difficulty finding local providers to get DME.

“The only way to stop the problems is to stop the program,”
Wilson said. “We urge Congress to step in and enact legislation to
repeal bidding. If Congress fails to act, the economic fallout and
the harm to the home care system and those that rely upon it will
be irreversible.”

Blackburn noted CMS required only one year of financial data
from bidders, which she said benefitted “less solvent companies.”
As a result, bid winners include “companies that have been
previously bankrupt, have been on the brink of bankruptcy or have
poor or absent credit ratings with major manufacturers,” she
said. 

“Yet, these firms are to honor a three year contract period at
unsustainably low levels of payment. How exactly is that to occur
without diminishing product quality or the level of service to the
patient?”

Despite Congress’ full plate of issues — including
averting a government shutdown — the briefing drew a
crowd.

“It was standing room only and at least 25 staffers were turned
away,” said Johnson.

Those who made it into the packed room also heard from speaker
Cynthia Morton, executive vice president of the National
Association for the Support of Long Term Care.

“If I had to summarize our perspective in one sentence, it would
be that the current competitive bidding program simply is not
properly designed, is fundamentally flawed and the ramifications
for patients will be serious and long-lasting,” said NASL’s
Morton.

The bidding process allowed bidders to submit low bids
“ostensibly to gain access to the market,” she explained, but they
were not bound by their bids and could later drop out. The
resulting rates “were unduly influenced by what I would describe as
drive-by bidders who did no more than drive the rates down and then
left the scene,” Morton said.

“It appears that some of the aspects of the competitive bidding
program are based more on math than on good policy. The focus on
cost savings has driven the program beyond rational limits and
rational processes — this needs to be fixed,” she
concluded.

Laurence Wilson, director of CMS’ Chronic Care Policy Group,
spoke to the group in defense of the bidding program, which rolled
out to nine Round 1 cities in January. According to CMS, things
are going fine. The agency plans to bid Round 2 in another 91
cities as early as this spring.

Johnson, however, said he was happy with the legislative aides’
interest in hearing more about the bid program, even though they
“only had about 48 hours’ notice” in advance of the meeting.

PAMS’ Shirvinsky echoed the sentiment. “Congressmen Thompson and
Altmire were extremely supportive toward us and our position in
introducing our panel to the assembled staffers, many of whom were
representing freshmen members and were hearing about competitive
bidding for the first time,” he said. “Briefings like this are very
much of an inside-the-Beltway thing, but extremely important
because the sponsorship by a bipartisan team of congressmen gives
us a seal of approval and helps to put the issue on their radar
screens.

“I circled back to Congressman Thompson’s office later in the
day and was informed that they had already received numerous calls
for more information and requests to sign onto any legislation that
may be introduced,” Shirvinsky said.

“All in all, I’d say that made for a pretty good day.”

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