Altmire, Hall Call for Release of Bidder Names

WASHINGTON — Reps. Jason Altmire, D-Pa., and Ralph Hall,
R-Texas, are circulating a sign-on letter to colleagues asking CMS
to release the list of providers whose bids were used to calculate
single payment amounts in the Round 1 rebid of competitive bidding. They want
the missing names by Aug. 13.

The single payment amount is the median of the winning bids per
individual item within each product category included in the bid.
While CMS announced the rates resulting from the rebid on July 1
— with cuts across all product categories averaging 32
percent — the agency has said it won’t release the bid
winners until September, after all contracts have been
accepted.

But that’s too late to make sure the rates are legit, say
industry advocates pushing to show Congress that the bidding
program is still flawed. And besides, that list won’t tell the
whole story.

The names of those whose bids went into creation of the new
payment rates “is critical to understanding where the proposed 32
percent average savings came from and if the lowest bidders were
actually licensed, local and financially sound,” according to
officials at the Accredited Medical Equipment Providers of
America.

“We have been asking for this as an industry for the month since
the scores were released,” said Barry Johnson, AMEPA executive
board member and president of the Texas Alliance of Home Care
Services, “but having Congress call for this information is the
only way it may be released while it can be useful.

“CMS planned to release the awardees list in September, but that
does not reveal who created the low rates. That list will only
reveal those who have accepted contracts, not those who were
offered contracts,” said Johnson.

“A September release could also become an October release,
because they delayed the announcement of rates a month when they
were eventually released in July instead of June,” Johnson
continued. “If CMS waits until October to release the names of
those who accepted contracts, the industry will only have a few
days to respond before Congress goes on recess until after the
general election.”

A legislative alert about the sign-on letter from the American
Association for Homecare noted that in the initial Round 1 in 2008,
“a significant number of providers who were awarded contracts could
not deliver services commensurate with their bids.”

Contracts were awarded to inexperienced, non-local or unlicensed
providers, and “in some instances, ‘winners’ even attempted to sell
their contract to another provider,” the association said. “These
and other problems with the failed bidding process ultimately led
Congress to pass legislation that delayed the program so that CMS
could address these issues.”

Given past problems, AAHomecare said, delaying the release of
specific information about the bids “will only limit Congress’
ability to properly assess the rebid process and its potential
impact on Medicare patients.”

HME stakeholders charge that many of the problems that surfaced
in the original Round 1 haven’t been fixed. The fact that Orlando,
Fla.-based Rotech recently announced it had been awarded 17
contracts in the current bidding go-round doesn’t inspire much
confidence in the process, according to AMEPA’s Sean Schwinghammer,
executive director.

With more than $514 million in debt, the giant provider reported
in its May filing with the Securities Exchange Commission that it
might have to file for bankruptcy protection. And a
July 31 article in the Miami Herald, which quotes
Schwinghammer, pointed out the company has settled Medicare fraud
charges twice in the past eight years.

“The Rotech situation is a sad one, and it confirms what we’ve
been saying: that CMS is violating all their own rules and policies
and procedures,” Schwinghammer told the newspaper.

AMEPA, AAHomecare and other industry associations are urging all
HME providers to contact their U.S. representative to add their
names to the Altmire-Hall letter requesting release of the bidder
names. For direct connection to legislators’ Washington offices,
call the U.S. Capitol switchboard at 202/224-3121.

The “Dear Colleague” letter asking members of the House of
Representatives to sign on follows, along with the actual letter
that will be sent to CMS Administrator Donald Berwick.

INVITATION TO SIGN ON TO THE
ALTMIRE-HALL LETTER

Date: 8/2/2010

Dear Colleague:

Please join us in requesting that the Centers for Medicare and
Medicaid Services (CMS) release to us the list of the providers
whose bids were used to calculate the single payment amounts under
the re-bid of Round One of the competitive bidding program for
durable medical equipment (DME).

On July 1, 2010, CMS released the single payment amounts for the
product categories that were bid in the Round One re-bid. However,
CMS does not intend to release the names of the bidders whose bids
were used to determine the payment amounts until September.

As you are aware, during the initial Round One bidding process
in 2008, a significant number of providers who were awarded
contracts could not deliver services commensurate with their bids,
creating concerns that beneficiary access to quality home medical
equipment and services would be reduced. Among the problems that
surfaced in 2008 were that contracts were awarded to inexperienced,
non-local or unlicensed providers. In some instances, “winners”
even attempted to sell their contract to another supplier. These
and other problems with the failed bidding process ultimately led
Congress to pass legislation that delayed the program so that CMS
could address these issues.

Regardless of your position on the competitive bidding program,
transparency of the re-bid process is critical given the problems
experienced with this process in 2008. Delaying the release of
specific information about the bids until the fall will only limit
our ability to properly assess the re-bid process and its potential
impact on our constituents.

We hope you will join us in urging CMS to release the names of
the suppliers whose bids were used to determine the payment amounts
under the re-bid of the competitive bidding program. If you have
questions or would like to sign the letter, please contact Cara
Toman in Congressman Altmire’s office at 5-2565 or [email protected] or
Kyle Oliver in Congressman Hall’s office at 5-6673 or [email protected].

Sincerely,

Jason Altmire
Ralph Hall

LETTER TO CMS ADMINISTRATOR

Dear Administrator Berwick:

We are writing to request that the Centers for Medicare and
Medicaid Services (CMS) disclose to us the list of the providers,
by product category, whose bids were used to calculate the single
payment amounts under the re-bid of Round One of the competitive
bidding program for durable medical equipment, prosthetics,
orthotics and supplies (DMEPOS). Without knowing the identity as
well as the appropriate overall qualifications of these providers,
we cannot evaluate the program’s impact in terms of quality and
access to care for seniors we represent.

As you are aware, during the initial Round One bidding process
in 2008, a significant number of providers who signed contracts
were later determined to be sufficiently flawed in their
qualifications. Among the problems that surfaced were that bidders
did not have the financial resources to deliver services to a
larger number of patients or they had no experience in the product
categories for which they were awarded bids. Additionally, it was
discovered that several “winners” did not have the required
certification or licensure to provide the devices and services for
which they were awarded contracts, or they simply did not have a
physical location in the area. It was for these reasons and others
that Congress delayed implementation of the program and required a
re-bid.

We want to ensure that qualified providers have been chosen to
provide these items and services to our constituents. Our district
hospitals, physicians and elders who rely on home medical equipment
services will be dependent on the winning bid companies for these
critical in-home products. The healthcare community will again have
very serious problems if it turns out once more that these
companies are unable to provide sufficient access to quality items
and services or do not have the financial ability to operate under
the new contracted rates.

We understand that it is the intent of CMS to release the names
of the winning providers in September after it has finalized
contracts with these companies. Given the concerns with this
process in the past, we seek this information now in order to
evaluate the Round One re-bid in an open and transparent
manner.

Accordingly, we respectfully request that CMS provide to us a
list of the names of the suppliers, product categories and
competitive bidding areas for each of the suppliers whose bids were
used to determine the payment amounts no later than Friday, August
13, in order to enable us to appropriately assess the program’s
ability to meet the medical needs of our constituents.

We look forward to receipt of the requested information
promptly, and thank you for your cooperation in enabling us to
protect the health interests of our seniors.

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