Full-Court Press to Consider Bidding’s Effects on Small Business

WASHINGTON–With the July 1 implementation of competitive
bidding closing in daily, industry stakeholders spent last week
urging federal legislators to consider the impact of the program on
small business.

Attendees at American Association for Homecare’s Legislative
Conference March 4-6 followed up congressional visits, pressing
senators and representatives to sign on to letters to CMS
expressing concern about what will happen to small providers under
the bidding program.

The House version of the letter was authored by Rep. Jason
Altmire, D-Pa., chairman of the Small Business Subcommittee on
Investigations and Oversight, which last fall, convened a hearing
on the program’s possible effects. Sens. George Voinovich, R-Ohio,
and Sherrod Brown, D-Ohio, authored the Senate version.

Addressed to Acting CMS Administrator Kerry Weems, the Senate
letter states: “We believe that this payment strategy, as
currently structured, could significantly reduce [DMEPOS] quality
and access and have a devastating impact on small businesses
throughout the country.”

The House letter, among other things, asks that CMS
“provide detailed answers” to the following
questions:

— Of the 4,529 suppliers providing DMEPOS in the 10 competitive
bidding areas, how many suppliers submitted bids for each of the
product categories in each of the 10 bid areas? How many of those
companies were small businesses?

— In round one, how many contracts does CMS expect to issue for
each product category in each of the 10CBAs? Are initial bids
sufficient to ensure adequate access to each product category in
every initial CBA? Does CMS have a strong indication that most of
the selected suppliers will elect to participate based on the
median bid price?

— For round one, will CMS be able to meet the 30 percent small
supplier participation target that was established in the final
rule dated April 2, 2007, for each product category in each
CBA?

— Did CMS receive any applications from networks of small
suppliers? If so, how many, for what product categories, and in
what competitive bidding areas?

“We are also concerned,” the House letter continues,
“that CMS is expanding the program before the first phase has
started and the impact on beneficiaries’ access to DMEPOS can be
evaluated. Based on CMS’ timetable for implementing round two in 70
areas, it is unclear how CMS can modify implementation details of
round two based upon its experience in implementing round one. We
recommend that CMS consider creating additional measures to ensure
the healthy participation of small businesses in both
rounds.”

In soliciting House colleagues to sign on to the letter,
Altimire explained, “While we support efforts to improve the
Medicare program and reduce costs, we must also ensure the changes
do not unravel the DME small business community, and ultimately
limit access to quality care for seniors.”

AAHomecare also asked providers to request that their senators
and representatives send letters to Health and Human Services
Secretary Michael Leavitt asking him to suspend round one of
competitive bidding.

For a sample letter to HHS or to view the House and Senate
letters to CMS, visit www.aahomecare.org.