Associations Call for Rescission of Competitive Bidding IFR

ARLINGTON, Va.--In a letter sent Monday, the American Association for Homecare and 27 regional and state home care associations urged the White House Office of Health Reform, the Department of Health and Human Services and the Centers for Medicare and Medicaid Services to rescind the competitive bidding interim final rule before it takes effect April 18.

Issued on Jan. 16, literally in the waning hours of the Bush administration, the IFR requires a rebid of Round One in 2009.

Last July, Congress delayed the DMEPOS bidding program so numerous procedural and other problems could be fixed. But HME advocates have said that very few of the issues raised then have been addressed in the IFR.

Stakeholders have also estimated that in its current version, the bidding program will put at least 90 percent of providers, many of them small businesses, out of work.

“This is not the solution to Medicare’s reform and it is certainly not the answer for patients and seniors,” said Tyler J. Wilson, AAHomecare president. “This flawed regulation would wipe out small businesses across America and reduce quality and access to care for seniors and the disabled.”

The association letter was addressed to HHS Acting Secretary Charles Johnson, CMS Acting Administrator Charlene Frizzera and Nancy-Ann DeParle, director of the White House Office of Health Reform.

The full text of the letter follows:

Dear Acting Secretary Johnson, Acting Administrator Frizzera, and Ms. DeParle:

The American Association for Homecare and the 27 regional and state associations listed below, which represent providers of durable medical equipment (DME) and services, urge you to rescind the CMS competitive bidding rule published during the last hours of the Bush administration. The rule, which would re-implement Round One of the bidding program in the DME sector of Medicare, would reduce access to care and put thousands of DME providers out of business, eliminating jobs at a time when the federal government is trying to preserve them. The rule does not address the fundamental problems of the program that came to light during its brief implementation last year.

Because of flaws in the bidding program, Congress voted to reform and delay the program as part of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), enacted on July 15, 2008. CMS published an interim final rule on the bidding program on January 16, 2009, and that rule will be implemented on April 18, 2009, unless it is rescinded.

MIPPA addressed several near-term concerns with the program, but thoughtful and deliberate rulemaking by CMS was clearly expected by Congress, given the overwhelming level of congressional and stakeholder concern during initial implementation. The intent behind the MIPPA provisions on bidding was for CMS to correct the fundamental flaws of Round One of bidding, allowing for feedback from stakeholders through a comment period before CMS issued a final rule. This process did not take place and the flaws in the bidding program remain.

As currently designed, this bidding program will lower quality and reduce access to care for seniors and people with disabilities. Moreover, it will reduce competition, eliminating up to 90 percent of home medical equipment businesses in any market area where it is implemented. Many of these practices are small businesses already struggling under the current economic recession.
 
This bidding program allows the government to selectively contract with only a small fraction of current homecare providers, forcing out DME companies that provide high-quality equipment or provide critical patient services.

Competitive bidding, which would ultimately drive national reimbursement rates, ignores the critical role of services required to provide care to people in their homes. It will result in fewer resources for service-related activities that patients and physicians have come to expect, which allow people to remain in their homes. The program does not adequately account for providers’ ability to serve a geographic market. The program will produce a bureaucratic, anti-competitive price-setting system that would be similar to a closed-model HMO and would have the effect of government-mandated consolidation in the home care sector.
 
This is not the solution to Medicare’s reform--and it is certainly not the answer for patients and seniors.