Providers in Limbo as Bidding Questions Mount

ATLANTA — HME providers found themselves on another
competitive bidding
roller coaster ride last week as the Centers for Medicare and
Medicaid Services announced it was holding up announcement of the
Round 1 rebid contract winners.

“I think a number of things are going on behind extremely closed
doors,” said Cara Bachenheimer, senior vice president of government
relations for Elyria, Ohio-based Invacare Corp. “Maybe something
has gone awry, maybe our predictions have come true, but it’s very
hard to say. Nothing is being confirmed by CMS. They just say that
everything is on track.”

Everything, that is, except the list of companies that won
competitive bidding contracts.

In July, the agency said it would offer 1,287 contracts to
364 suppliers with 622 locations. CMS was to have revealed the
companies that were chosen in September, but during an Oct. 14 Open
Door call, an agency representative said release of the names was
pending based on examination of “red flags” that surfaced when the
agency tested “a new program integrity tool.” (See story this
issue.)

Nevertheless, CMS’ Michael Keane said the agency expected to
move forward with announcement of the winners and implementation of
the program — set for Jan. 1 — “very soon.” And despite
industry speculation to the contrary, a Friday post on the CMS website noted there would “be
more than enough qualified suppliers in all of the 9 sites to
assure beneficiary access to equipment and supplies.”

But Waterloo, Iowa-based VGM isn’t buying it. The member
services group reported late Friday that CMS was still trying to
find providers to accept contracts and was offering them as little
as 24 hours to accept or decline.

“If you’ve been recently contacted by CMS regarding competitive
bidding contracting, and you’ve got a story to share, we’d like to
hear it,” VGM said in a Legislative Update, adding that providers
should e-mail their stories to [email protected].
“VGM is currently working with multiple legislators from several
angles, and needs to know if unscrupulous tactics are taking place
at CMS.”

The organization also advised providers that if CMS offered them
anything less than the 10 days allowed to other suppliers, they
should “respectfully request the same time period to contemplate
financial viability based on contract terms.”

Provider Rob Brant said he also had a problem with CMS’
explanation of the announcement delay. “We’re in a holding pattern
because the companies that are bid winners — and those that
haven’t won — don’t know what is going to happen Jan. 1,”
said Brant, who serves as president of the Accredited Medical
Equipment Providers of America.

Brant said he believes the CMS delay was calculated. “My feeling
is that [CMS] is aware — or starting to figure out —
that some of the companies they have contracted with are under
[Zone Program Integrity Contractor] audits or under 100 percent
pre-pay audit … They intentionally delayed this announcement
until it was too late for Congress to act.”

Even as the scenario was playing out last week, stakeholders
were also speculating about reports of a meeting scheduled with
White House economic advisors, CMS officials and Peter Cramton, a
professor of economics at the University of Maryland and an
outspoken critic of the bidding project’s design. But a CMS
spokesman said Friday the agency had no knowledge of such a
meeting.

“Will it occur? Will it change CMS’ actions?” Bachenheimer asked
rhetorically. “We can hope, but I wouldn’t put a lot of money on it
because there have been so many other instances where CMS has had
the opportunity to make some changes and improve the program, but
CMS has refused.”

Spearheaded by Cramton, a letter signed by 166 economists
setting out the competitive bidding project’s flaws was sent to
Rep. Pete Stark, D-Calif., chairman of the House Ways and Means
Subcommittee on Health, who sent the letter on to CMS and asked for
a response. Although CMS has not yet replied, the agency
spokesman said, it planned to.

Added to the swirl of activity, Stark could hold a November
hearing on the bidding program that could, Bachenheimer said,
“illuminate some of the issues that we see. But those things are
all up in the air at this point. That’s what makes it so bad.”

Providers must have time to ramp up for competitive bidding,
Bachenheimer said. “You can’t just turn on the switch in 24 hours,”
she said. “Depending on how long [the delay in announcing contract
winners] goes, if it goes to Nov. 1, I think we have an extremely
strong argument that CMS has got to delay it. Tick tock, tick,
tock.”

But Provider Chris Rice of Diamond Respiratory Care in
Riverside, Calif., said delaying the program again shouldn’t be an
option. A contract winner in the original Round 1 and its rebid,
Rice said he had made a significant investment in preparing for
competitive bidding.

“When we did this the first time, we sat down and figured out
what our expansion plan would be and we put that plan into place
two years ago, so all that has been done and is in place,” Rice
said last week, noting that preparation included buying trucks,
arranging warehouse space, buying extra inventory and hiring
people. “We still have the infrastructure. But it could get delayed
again, so all that could be for naught.

“Eliminating [competitive bidding] would be good; another delay
would be a concern,” Rice said. “How many times are we going to
have to revisit this? It really needs to go away.”

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