ATLANTA--Mandatory accreditation and Round Two of competitive bidding have been on the industry's radar for months, but the whirlwind of recent CMS announcements detailing dates and deadlines nevertheless stirred stakeholder reaction.
While the deadline for Round Two accreditation has not yet been given, shortly before Christmas CMS set Sept. 30, 2009, as the "drop dead" date by which all DMEPOS providers must be accredited. On Tuesday, the agency followed with the list of the next 70 MSAs that will be included in phase two of the bid.
To some, including Cara Bachenheimer, vice president, government relations for Invacare Corp., Elyria, Ohio, CMS' list of the MSAs selected for inclusion came as a surprise.
"Some major metropolitan areas are omitted--Boston, Baltimore, Washington, D.C., and Seattle--and CMS is including some very sparsely populated MSAs. There is no information about why CMS selected these MSAs and omitted others, aside from the criteria in the final rule, so we may well never know the more specific selection criteria," she said.
Consultant Wallace Weeks of Weeks Group, Melbourne, Fla., was also surprised at the cities that were chosen. Weeks had worked up a forecast of cities that would be targeted in Round Two based on the selection criteria CMS outlined, "but my forecast was very wrong," he said. "Only a little over 60 percent of the MSAs I forecast were on the final list."
However, Weeks continued, "It is good that CMS has announced as early as they have and that the initial bidding process doesn't begin until winter of this year. I think that the list of MSAs treats the industry as a whole better than I had forecast. If they had gone for the larger MSAs like Boston, Philly, Phoenix and Seattle, there would have been a larger impact on the industry."
Weeks said the fact "that a mail-order bid for diabetic supplies is postponed is also a plus for the industry." While those products are excluded from the second phase of the bidding program, CMS said it is planning a national bid for these items with details to be announced later.
At a conference on competitive bidding sponsored by the Georgia Association of Medical Equipment Services, held in Atlanta just two days after CMS' Jan. 8 Round Two announcement, many providers said they were ready. Some, however, said they were concerned that results from Round One of the bidding program were still unknown.
Others, like Tim Pederson, CEO of WestMed Rehab in Rapid City, S.D., said the HME industry should know by now that it must be prepared for anything. "Providers that are prepared will do OK. Providers that aren't prepared will be hitting the panic button," he said.
But ready or not, competitive bidding is moving forward, and its final outcome is, at least at this point, still anybody's guess.
In the wake of the recent announcements, here's what stakeholders had to say:
On accreditation:
"Accreditation is a given, and it has been for a while. Anyone who is going to be in this industry should be accredited or should be in the process. If you're not well on your way, get started tomorrow!"
--Don Clayback, vice president, government relations, The Med Group, Lubbock, Texas
"My initial reaction is that we are going to have to organize time for the providers. In other words, we're going to have to catch the information up front: Are you being accredited for a fraud demo deadline? Are you being accredited for an MSA deadline? Are you looking for accreditation by September '09? From there, we can give [providers] deadlines. If you need to be accredited by whatever the MSA date is, you have to be finished with your work by this date in order to get your survey in on time."
--Mary Nicholas, executive director, Healthcare Quality Association on Accreditation, Waterloo, Iowa
"Mandatory accreditation is going to eliminate 80 percent of supplier numbers. We'll probably lose 90,000 [suppliers] from accreditation. The accreditation is going to be what causes the eliminations. And with the losses of all these small providers, access is going to be affected--it has to be."
--Wayne Stanfield, president and CEO, National Association of Independent Medical Equipment Suppliers, Halifax, Va.
On the MSAs chosen for Round Two:
"I was surprised at the omission of certain geographic areas. Some large cities were not represented on that list, like Philadelphia, Seattle, Portland, St. Louis. That was surprising to me ... It's almost like [CMS] threw darts at a map."
--Tim Pederson, CEO, WestMed Rehab, Rapid City, S.D.
"The interesting part is the cities that were listed ... I wonder what [CMS'] methodology was. I think it caught a lot of people off guard. Some people are going to be amazed that they are included."
--Mary Ellen Conway, president, Capital Healthcare Group, Bethesda, Md.
"Out of the top 10 MSAs, only No. 5--Philadelphia-Camden-Wilmington--and No. 8-Washington-Arlington-Alexandria--are not included. A very calculated move, so Congress won't have to hear complaints from providers and beneficiaries in their own backyard."
--Rob Brant, general manager, City Medical Services, North Miami Beach, Fla.
GAMES members on getting ready to bid:
"As far as preparing for the second round, our particular MSA was obvious, so we were thinking about it. Now we have to go through with the implementation. Do I think there's an opportunity there to survive? Yes. My end result is probably going to be to change my business plan, change the way I do business ... Not having the results of the first round is the most devastating part because you don't know how to address it or how to react."
--David Petsch, owner, Petsch Respiratory Services, Martinez, Ga.
"I think that half of the small providers are not even going to submit a bid. I think of the ones that do submit a bid, half of them will screw themselves out of the bid because they won't understand how to do it."
--L. Jack Clark, RRT, founder and principal, Mid Georgia Respiratory, Macon, Ga.
"I feel like we'll be more prepared for this round when it comes through Atlanta. I had attempted to bid in Charlotte, and it was so complicated and confusing and time-consuming that I quit halfway through. I was disheartened because it was so overwhelming. But with us having information from the first bid, the second round should go a whole lot better."
--Todd Tyson, president, HiTech Healthcare, Norcross, Ga.
"I think this is positive. Through each challenge, ultimately you get better. You have to continue to improve your processes and improve your company."
--Andrew Simmons Jr., vice president of field operations, Cornerstone Medical, Atlanta, Ga.
On the inclusion of complex rehab in Round Two:
"Obviously I disagree with the inclusion of complex rehab. There's no rationale for including that in competitive bidding. That's why we need to redouble our [legislative efforts] to carve that out."
--Tim Pederson, CEO, WestMed Rehab, Rapid City, S.D.
"I am very disappointed that CMS included complex rehab in Round Two. Utilization of complex rehab power wheelchairs has declined since the implementation of new codes and coverage policies. And utilization of these devices was already low relative to other products ... There is evidence that the impact of coding, coverage and pricing changes has already caused tremendous financial stress on the rehab industry. I had hoped that efforts ... would convince CMS to pause long enough the see the results of Round One before putting thousands of individuals with disabilities at risk in 70 of the largest MSAs. This will not have the impact CMS is claiming; competitive bidding of complex rehab cannot even guarantee the same quality goods and services available today."
--Rita Hostak, vice president of government relations, Sunrise Medical, Longmont, Colo., and president of the National Coalition for Assistive and Rehab Technology
On pending lawsuits and legislation that would stop/alter competitive bidding:
"I hope that [competitive bidding] will accelerate the industry's [legislative] actions, and some people that were standing in the background waiting for other people to do what needs to be done--waiting for CMS to see that this is illogical and reckless--will now step up to the plate ... Together we can get it done more effectively."
--Jason Rogers, president, Care Medical, Athens, Ga.
"The announcement by CMS regarding Round Two for competitive bidding hits the industry hard. Providers are more worried now than ever about the future of their businesses. The industry needs to come together to fight the current state of affairs by reaching out to their legislators. We can't sit back idly and allow this to happen without a fight. AAHomecare, state associations, Invacare, VGM, The Med Group and many other organizations have been trying to get members of our industry to stand up and be counted, but few have answered the call."
--Sarah Hanna, vice president, ECS Billing & Consulting, Tiffin, Ohio
"Anytime legislation is challenged in the court, it's an uphill battle. We feel that we have good arguments in the Dallas case and in the Cleveland case, and we plan to push forward with them, but the industry cannot look at these lawsuits as the magic bullet. The industry needs to prepare for competitive bidding, work within the parameters of competitive bidding, and then if one of these lawsuits is successful, then that's very good for the industry."
--Jeff Baird, chairman of the Health Care Group, Brown & Fortunato, P.C., Amarillo, Texas
"There are legislative opportunities with the Tanner-Hobson legislation, which would provide some legislative relief. We want to build on the momentum that we built in 2007."
--Don Clayback, vice president, government relations, The Med Group, Lubbock, Texas
"I'm interested to know how many of [the areas CMS has chosen] have more than half-a-million people (in total population). These areas would be automatically excluded under Tanner-Hobson. We need to continue to get sponsors. Also, H.R. 2231 is gaining more cosponsors, but it's at a snail's pace."
--Tim Pederson, CEO, WestMed Rehab in Rapid City, S.D.
"Congressional action is the only way [competitive bidding] is going to get stopped. What we have to hope happens is what we feel in our hearts--that it's not going to work. I think [competitive bidding] is going to be devastating to the beneficiary population, and I think once all the people see the impact, there will be congressional action to delay it, but if we can stop it or not, I'm not sure."
--David Petsch, owner, Petsch Respiratory Services, Martinez, Ga.
On what happens now:
"The most disturbing thing is that CMS' implementation plans for Round Two will ensure that they are not able to make any adjustments in Round Two based upon impacts of/lessons learned from Round One. That seems counter to Congress' intent, which provided for a two-year span between the implementation of Rounds One and Two. Congress purposefully required CMS to roll out such a massive program in multiple phases so they would be able to learn from their own experience. Just because CMS got behind in implementing Round One doesn't mean the rest of the country subject to Round Two should suffer."
--Cara Bachenheimer, vice president, government relations, Invacare Corp., Elyria, Ohio
"As hard as we've worked, we've had little or no effect on the mentality of CMS and how they're going to roll forward from here--and they're going to roll forward by rolling right over us."
--Jason Rogers, president, Care Medical, Athens, Ga.
"I don't have a sense yet of how, if you get paid less than you were getting paid, you could offer anything but less service and quality. The patient's co-pay may shrink with the degree that the bid price shrinks, but it will be at a cost of getting low-quality products and no service."
--L. Jack Clark, RRT, founder and principal, Mid Georgia Respiratory, Macon, Ga.
"If the government continues to tighten the requirements just to file a Medicare claim, the patients will be the real ones to suffer because there will be limited access to care. It is almost unaffordable to provide service in an environment when we have to add layers of employees just to comply with rules that bring us the same or less money than we've received in the past. The real question is: When do we get to tell our side of the story? I'd be happy to inform CMS about the good work done for patients who would otherwise go without. When disasters strike, I've never heard of a provider saying no, even [though] they do not earn one dime more for their valiant efforts. Well, maybe we should rephrase it--maybe they haven't had to say no just yet!"
Miriam Lieber, Lieber Consulting, Sherman Oaks, Calif.
"I think right now the way it's headed, it will be negative. CMS is moving much too quickly. There was a great deal of difficulty in Round One and, now, without even taking a pause to learn from that experience, they're going forward and expanding seven-times plus."
--Don Clayback, vice president, government relations, The Med Group, Lubbock, Texas
"I am very concerned about the impact on the industry. Am I worried enough to give up the ship? No."
--Tim Pederson, CEO, WestMed Rehab, Rapid City, S.D.
"To begin, the 'Armageddon' predictions offered by some industry stakeholders shortly after the MMA was published will not, in my opinion, occur. While there will certainly be some significant Round One reimbursement reductions, providers serving the Round Two areas have the relative luxury of sufficient time to prepare for the 2009 contracts ... With that said, if I was asked whether there will be a large number of Part B suppliers who will cease serving Medicare beneficiaries or perhaps go out of business, the answer is yes. But there are over 100,000 active Medicare Part B supplier numbers. The number of full-line HMEs and other DMEPOS companies servicing beneficiaries on a regular basis is much smaller--less than 20,000. Of these, while acknowledging many will be affected in some manner by competitive bidding, the great majority will continue their quality home care services as before. Many will reap the benefits of increased business."
--Mark Higley, vice president of development, VGM Group, Waterloo, Iowa
"I am very bullish on the industry, and I think it's going to continue to grow. Let's not be pessimistic. I think we have the right to be optimistic. Simply, the landscape has changed; we're having to play by new rules. Change is always traumatic, but if we are proactive and aggressive and as long as we're not scared of our own shadow, I think the well-run HME business--whether it's a major or a regional or a mom-and-pop--is going to do very well."
--Jeff Baird, chairman of the Health Care Group, Brown &
Fortunato, P.C., Amarillo, Texas.
