Government Brings in Power Players for Competitive Bid Hearing

WASHINGTON — The government is bringing in a power panel
of witnesses to defend Medicare’s competitive bidding program at a
congressional
hearing scheduled Sept. 15.

Called by the Subcommittee on Health of the House Energy and
Commerce Committee, the hearing will “examine the conception and
implementation of the competitive bidding program, the
implementation of the Round 1 re-bid, and its potential effects on
patients, providers, and suppliers,” according to a notice.

A list of invited witnesses posted Monday includes for the
government:

• Laurence Wilson, director of the Centers for Medicare and
  Medicaid Services’ Chronic Care Policy Group;
• Inspector General Daniel Levinson from the Department of Health
  and Human Services’ Office of Inspector General; and
• Kathleen King, director, Health Care, Government Accountability
  Office.

A second panel of witnesses representing various interests
includes:

• Richard Lerner, president of Allcare Medical in Old Bridge,
  N.J., who will testify on behalf of the HME industry as a
  representative of the American Association for Homecare and the
  Jersey Association of Medical Equipment Services (see Allcare
  Medical to Testify at House Bid Hearing);
• Alfred Chiplin, managing attorney, Center for Medicare
  Advocacy;
• Nancy Schlichting, president and CEO, Henry Ford Health System;
  and
• William Scanlon, a health policy consultant. A commissioner on
  the National Commission for Quality Long-Term Care, Scanlon is a
  member of the Medicare Payment Advisory Commission and co-chairs
  the HHS Review Panel for the Medicare Trustees Reports. He has
  previously served as managing director of health care issues at the
  GAO.

An update from the Accredited Medical Equipment Providers of
America calls the latter three “wild cards.”

Chiplin’s testimony “will probably be identical to what the
witnesses from Medicare, the Government Accountability Office and
the Office of the Inspector General will say,” according to the
group, which believes Scanlon will also side with his colleagues
from CMS, OIG and GAO.

Schlichting, AMEPA said, “could discuss how the program will
make it nearly impossible to discharge patients from hospitals.
However it is anticipated that she will be pushing H.R. 6065, the
bill from Michigan Congressman John Dingell to exclude
hospital-based DME providers from the bidding program.”

As background, an 11-page “briefing memo” sent to members of the
subcommittee and congressional staff gives a rundown of “issues in
pricing and integrity of DMEPOS,” including “numerous reports over
several decades” in which the GAO and OIG have documented
overpayments, improper payments and instances of fraud.

The brief also includes a list of the single payment amounts
recently announced as a result of the Round 1 rebid, noting that
“average price savings across all product categories was 32% for
both the federal payment and for beneficiary cost sharing
obligations.”

For oxygen concentrators, the memo gives as an example, “average
monthly payment in competitive bidding areas will be reduced from
$173 to $116, a reduction of $46 per month for federal Medicare
payments and a reduction of $11.40 for beneficiary cost sharing.
Over 3 years (the maximum payment term for oxygen equipment), the
Medicare savings for an oxygen concentrator will total $1,642, and
the beneficiary cost sharing savings will be $410, on average.”

The hearing room could prove a tough battleground since most HME
stakeholders consider competitive bidding and its “suicidal” rates
the industry’s overarching threat.

“It looks like the people there from the government are going to
be the people who are going to talk about fraud and abuse in DME,”
said Dave McCausland, senior vice president of planning and
government affairs for The Roho Group, Belleville, Ill. “They are
not going to talk about whether the [competitive bidding] program
makes sense or not.” (See Save
Homecare Now for more from McCausland.)

Nevertheless, industry advocates may get some help. Of the 35
subcommittee members, 19 representatives have signed on as
cosponsors of H.R. 3790, the bill that would repeal the bidding
program.

“I want to see beneficiaries getting quality goods and services
and fair and equitable reimbursement for DME,” McCausland said. “To
do that, the parties need to work together. Right now, we are not
even talking the same language.”

The hearing will begin at 10 a.m. Wednesday in Room 2123 of the
Rayburn House Office Building.

A PDF of the
full briefing memo is available on the health subcommittee’s
hearings page.

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