WASHINGTON--Rep. Fortney “Pete” Stark, D-Calif., chairman of the House Ways and Means Health Subcommittee, is expected to introduce a bill as early as this week calling for a delay of Medicare’s DMEPOS competitive bidding project, industry insiders said last week.
But the only way for such a proposal to gain traction is for the home medical equipment industry to exert as much pressure as possible on members of Congress to back the bill, stakeholders said.
At a hearing called by his subcommittee May 6, Stark labeled the bidding program "somewhere between flawed and lousy" and said he would work with the industry on an alternative.
“We expect Mr. Stark to be introducing a bill [this week]. He is committed to a speedy consideration of the bill, but whether they are able to attach it to a Medicare package that goes to the Senate or whether it goes on its own, it will need significant support,” said Cara Bachenheimer, senior vice president, government relations, for Elyria, Ohio-based Invacare.
Bachenheimer said HME providers must continue to make their case for a delay in implementation of the CMS project by citing its numerous flaws and the resulting devastation to beneficiaries, as well as to the industry.
“CMS is not going to budge without, literally, an act of Congress,” Bachenheimer said. “We’ve just really got to increase the noise level across the country,” she emphasized. “Every senator and every representative needs to hear from their constituents … This is crunch time.”
News of the impending bill follows weeks of intense industry efforts to inform Congress about the lengthy list of problems with the program, which is set to be implemented July 1.
Among a multitude of issues, questions have surfaced on the integrity of the bidding process; allegedly improper bid disqualifications; unclear provisions regarding subcontracting; beneficiary access; protection of small business; accreditation and licensure; and the quality of service bid winners with no experience in the product category will be able to render to patients.
To press those and other concerns, the American Association for Homecare sponsored a fly-in May 21 that sent 160 stakeholders to see legislators on Capitol Hill. The same day, the House Small Business Subcommittee on Rural and Urban Entrepreneurship held a hearing on competitive bidding that AAhomecare said raised “grave doubts about CMS’ claims of improved accuracy, savings for taxpayers, fairness to small businesses and ensured access and quality for beneficiaries.”
A clinician call-in the following day--with participation from some 20 advocacy and clinician groups--registered more than 1,500 calls to legislators asking for a complex rehab carve-out from competitive bidding.
In addition, letters citing serious concerns about the bidding program and asking for its delay have been sent not only by industry members but by members of Congress themselves to key House and Senate committee chairs, CMS and Department of Health and Human Services Secretary Michael Leavitt.
While all of this is positive, stakeholders warned this is not the time to back off.
“The next three to four weeks are very critical,” said Tyler J. Wilson, president of AAHomecare. “This is not the time for people to pat themselves on the back and say, ‘I went to the fly-in and now let’s just sit back and let the process go on.’ We have to continue to make our voice heard, make sure the beneficiaries know what they will face if this goes through. Keep up the pace, keep up the pressure. We are in a critical phase here.”
Wilson said the industry is calling for a one-year delay of round one and 18 months for round two of competitive bidding.
“The goal of the delay is not just delay for delay’s sake,” he said. “It’s designed to give Congress time to reassess whether competitive bidding is the best mechanism for home medical equipment.”
With implementation of the program just a month away, he noted, “there continue to be a lot of problems. Nuts-and-bolts issues have not been properly addressed by CMS and all … the unanswered questions and the failure of CMS to do adequate education is going to come together in a morass [of problems].”
Even as industry power-hitters were talking to lawmakers and government officials, more problems were surfacing, this time related to CMS’ announcement of the round one bid winners.
On May 19, CMS released the names of 325 contract winners in the first 10 competitive bidding areas. CMS officials said contracts were offered to 23 percent of the providers submitting bids. They also noted that about 50 percent of the contracts went to small suppliers, those with revenues of $3.5 million or less. (See HomeCare Monday Special Alert, May 19.)
After analyzing the information, however, stakeholders questioned not only CMS’ figures but also raised numerous other questions.
“The biggest concern is the licensure issue in Ohio and Florida, where there are more than a handful of providers who don’t appear to hold licenses in the state,” said Bachenheimer, referring to the two states’ requirement that home oxygen suppliers be state-licensed (see “Oxygen Licensure Is Issue for Some Bid Winners” in this issue).
Under competitive bidding rules, winning bidders must be in compliance with all applicable laws, Bachenheimer said. If some providers are unlicensed in areas where licensing is required, she said, “then those bids should have been thrown out on that basis alone.”
CMS has sidestepped questions on that issue by pointing to the fact that the companies are accredited, according to Julie Piriano, director of rehab industry affairs for Quantum Rehab, a division of Pride Mobility Products, Exeter, Pa.
“All the companies are accredited,” she said. “The real issue is that [accrediting organizations] were directed to assess companies for accreditation based on quality standards; however, the quality standards are still in draft form.
“That’s where the concern comes in,” she continued. “None of the accrediting organizations has a tool with which to work to assess the companies they were assessing.”
Another concern, Piriano pointed out, is that 155 standard power wheelchair providers received contracts but only 31 of them won complex rehab contracts as well. That means, she said, that a beneficiary using a standard chair who needs to ratchet up to a custom rehab device very likely would not be able to work with his/her current provider.
The provider with the standard wheelchair contract but no complex rehab contract “would need to refer it out, and that beneficiary would need to start the process all over again with somebody different,” Piriano said, adding that shift could impede service times.
She noted there are three major “worry areas” where this could likely happen: the Pittsburgh, Kansas City and Miami CBAs.
“There are only four complex rehab providers in each of those markets,” she said.
Piriano also said there are concerns that some providers who were awarded complex rehab contracts have never serviced that segment before.
“There are some basic competency issues,” agreed Bachenheimer. “[Many] providers did not win in their core competency; they lost in their core competency.”
As well, there are educational issues. In call-ins to CMS and in other forums, providers have pressed the agency on when and how it would educate beneficiaries on the coming changes, particularly since there are only a few weeks left until the program takes effect.
“It’s an expectation coming from CMS that we will indeed help educate beneficiaries,” said Wilson. “But our efforts have to be complemented in a significant way with efforts from CMS.
“There are just a lot of unanswered questions,” Wilson continued. “Unlicensed contractors being awarded contracts, questions about capacity; questions about providers who don’t have a history of providing products in a certain category, questions about providers that are new to a geographic area.”
There are so many unanswered questions, he said, that competitive bidding cannot be allowed to move forward.
However, Wilson and others are fully cognizant that if the industry is successful in getting a delay, it will need to somehow pay for the savings CMS says it would have reaped under competitive bidding.
“How do you pay for that delay? The offset that we have offered in a measured way until we know what the numbers really are is that this industry would be willing to look at an across-the-board cut in DME depending on the size of the cut needed,” Wilson said. “We’re willing to give something back in order to stop the clock.”
While providers won’t know what size cut they have to come up with until that information is released by Congressional Budget Office, Wilson said the offer of an across-the-board cut was made with the stipulation that “this would be the only cut this year to DME. We are not willing to talk about additional cuts in the oxygen benefit and power mobility,” both of which have been on the table in recent months.
As the legislative push for delay gains momentum, Wilson said AAHomecare is also pursuing probable legal action.
“While we continue to press on the legislative front, we are examining and really setting in motion what we need to do to pursue a court challenge to competitive bidding,” he said. “HHS has not met its statutory mandate and has not done the things they were required to do.”
The association is working with the Washington law firm of Sidley, Austin to compile the necessary data to pursue an injunction that would halt implementation of both rounds one and two, he said.
Already, one injunction against competitive bidding is being sought by Cleveland-based Walter & Haverfield LLP, which is handling a lawsuit backed by Last Chance for Patient Choice, an educational entity created by Waterloo, Iowa-based VGM to fight competitive bidding.
Whether legislatively or legally, whatever happens has to happen fast.
“We’ve got three to four weeks to get this resolved,” said Bachenheimer. “This is no time for a vacation.”