One More Hiccup: Industry Braces for Veto of Bid Delay

WASHINGTON–In the latest twist in competitive bidding’s wild ride, President Bush vowed last week to veto H.R. 6331, the hard-won Medicare legislation that includes a delay of the problematic project.

But industry stakeholders were cautiously optimistic that the votes in both the House and Senate would stand in an override vote, which could come as early as Tuesday.

Last Wednesday, the Senate, by a margin of 69 to 30, voted to pass the Medicare package, which mandates a delay of competitive bidding until CMS can address the project’s numerous problems. In June, the House approved the bill by a margin of 355 to 59. (See HomeCare Monday Special Alert, July 9.)

A White House veto, however, would send the bill back to both chambers for a vote to override. Passage in the Senate would require 67 votes.

“I don’t want to be overly confident and we can’t afford to lose a vote, but it would be very unlikely for a Republican to change their vote. They’d look idiotic,” said Cara Bachenheimer, senior vice president of government relations for Elyria, Ohio-based Invacare. “It is very much a possibility that more Republicans would vote in support of the override. But we have to keep the pressure on.”

Bachenheimer said she was not sure when exactly competitive bidding would be halted if the president signed the measure or if Congress overrode his veto.

“I’m not sure how CMS would implement the immediacy of that. We have no idea exactly how CMS is going to act to suspend those contracts and enact Congress’ legislation,” she said.

Contacted by HomeCare, CMS refused to comment on the means the agency would take to stop the program, how it would alert beneficiaries and providers, what delay, if any, providers could expect in reimbursement and how much it would cost to shut down round one.

“Until the bill is enacted into law, we can’t answer any of those questions,” a CMS spokesperson said.

As of Friday, Bush had not yet taken action on the bill. Washington insiders said he was trying to drum up three more votes against the legislation, which could kill a Senate override.

Seth Johnson, vice president of government affairs for Exeter, Pa.-based Pride Mobility Products, said he thought last week’s Senate vote, which saw 18 Republicans going against the president to vote in favor of the legislation, would stand.

“It’s really hard for me to understand why legislators who supported the measure would change their vote and let the president be successful in his veto,” Johnson said. “I just think there is too high of a price to pay [in an election year] if they do that.”

The president’s quarrel with the Medicare package, officially known as the Medicare Improvements for Patients and Providers Act of 2008, is not the competitive bidding delay. The industry’s provisions are piggybacking on Congress’ need to reverse a 10.6 percent reimbursement cut for physicians, which was to take effect Jan. 1 of this year but has twice been temporarily delayed.

H.R. 6331 not only reverses the cut but also provides a 1.1 percent raise to physicians. But to pay for the so-called “doc fix,” the bill makes cuts to Medicare Advantage plans, which Bush opposes.

“We are not the main event here,” said Bachenheimer. “We’re the sideshow. This is a battle between managed care and physicians.”

The clamor for the bill to be enacted is growing, Bachenheimer said, largely because Medicare payments to physicians have been delayed since July 1, and on Tuesday, July 15, the pay cut for physicians is again set to take effect.

“That’s the magic day for physicians,” Bachenheimer said. “This could be wrapped up by close of business Wednesday.”

That would not be a moment too soon for HME providers serving patients in the 10 round one CBAs, where CMS implemented the program July 1. Since, CMS, the American Association for Homecare and other organizations have been swamped with reports of problems.

“The new Medicare competitive bidding program … has created concern and chaos for beneficiaries, physicians, hospital discharge planners and home medical equipment providers across the country,” according to an AAHomecare report.

“Mounting complaints have been made to [AAHomecare] about the bidding program, including delays in patients being discharged from hospitals because proper equipment cannot be obtained in a timely manner for use in their homes; Medicare beneficiaries calling their previous providers frustrated because they cannot find new providers to deliver equipment they need; and providers making referrals for their previous patients but finding that providers who won bids are unwilling or unable to service the patients’ needs,” the report said.

AAHomecare cited one instance on July 2 when a Miami-Dade hospital placed an order for liquid oxygen for a patient on a high-liter flow.

“We found that none of the companies we called carry liquid oxygen systems,” Dr. Natarajan Rajagopalan, M.D., the hospital’s chief of staff, told the association. “I found out that with the goal of finding the lowest bidder, companies can subcontract specialized oxygen services through unaccredited companies. They are not required to have equipment set up by or have the patient trained or evaluated by a respiratory therapist.”

Bachenheimer also pointed to “one survey that said that 60 percent of the winners they called refused to provide the product because they said it was too far away or that they couldn’t provide the product for three, five or even 12 days.”

The new Medicare package would require CMS to address such problems and other issues and make what Bachenheimer called “substantive changes to the regulation.”

“They’d have to go back to the drawing board and do a new proposed regulation,” she said. That would likely delay competitive bidding for at least 18 to 24 months. “The dates are not set in stone,” Bachenheimer said, but “it’s essentially a two-year process.”

Passage of the Medicare legislation, she added, was a huge victory for the HME industry. “Every time legislation has been passed in the last 20 years, it has been negative,” said Bachenheimer, who has a long history in the industry. “I can’t recall a time when we’ve had a reason to celebrate some action from Congress. It’s been cuts, cuts, cuts–everything from the Six-Point Plan to rental rates for oxygen.”

In addition to the delay, Bachenheimer noted the legislation also repeals the title transfer of oxygen equipment to beneficiaries mandated under the Deficit Reduction Act. (For highlights of H.R. 6331’s competitive bidding provisions, see Bachenheimer’s summary in this issue.)

But the industry isn’t completely off the hook. To make up for the $1 billion annual savings CMS had projected competitive bidding would achieve, H.R. 6331 also requires a 9.5 percent reimbursement reduction for the 10 product categories included in round one. The cut would be applicable to all providers nationwide.

“The 9.5 percent cut is not our first choice,” Bachenheimer said, “but it was a political necessity. We had to take the best package we could bargain for.”

Johnson said the cut would become effective Jan. 1, 2009. “We are concerned about that, specifically for power wheelchairs, because of the significant reductions that have already taken place [for that product]. We are continuing to raise concerns with our friends on the Hill as to the impact that cut will have.”

He said the industry would seek to eliminate or reduce the cut by Jan. 1.

“From that perspective, the fight is not over,” he said.

Meanwhile, until more action is taken on H.R. 6331, competitive bidding is in force, Johnson said.

“Nothing has changed officially,” he said. “Until the bill is signed into law or is enacted [by a Congressional override vote], competitive bidding will remain in place.”

That saddens Nancy McGuckin, vice president of Advanced Vehicle Modifications in Ocala, Fla., who told HomeCare the company had just turned away its first two CBA patients who were seeking new wheelchairs.

“The feeling we had, as DME supplier and employees, was extreme sadness,” she said. “These patients were shocked to learn, for the first time, that we cannot provide equipment to them any longer.

“We are over our anger and frustration about competitive bidding and now just feel sad. Sad mostly for the patients and, yes, their families,” McGuckin said. “And, we feel helpless to advise them other than [to] please contact your senators and representatives. But they just want someone to help them–as we always did.”