CMS’ Blum Gets No Positive Feedback on Competitive Bidding

ORLANDO, Fla. — Apparently hoping to better understand the
effects of Round 1
competitive bidding, CMS’ Jonathan Blum heard from Florida
providers last week in a quick meeting that nevertheless pointed up
the severe cracks in the program, according to attendees.

“It seems as though he was there to collect information and see
how they could improve Round 2,” said Sean Schwinghammer, executive
director of the Florida Alliance for Home Care Services. “But there
are fundamental problems here; they are not little clean-ups.”

Blum, CMS deputy administrator and director of the Center for
Medicare, called the Orlando, Fla., meeting. He was accompanied by
Robert Foster, special assistant to the Office of the Regional
Administrator (Atlanta); Elaine Hensley, the chief ombudsman for
the CBIC; and Letisha Davis, the CBIC ombudsman for the Miami
area.

Schwinghammer said he had two days’ notice (one of which was
Presidents’ Day) that the Feb. 23 meeting was to occur. Still, more
than a dozen providers including members of FAHCS and the Florida
Association of Medical Equipment Services showed up, and three
dozen sent in letters detailing their experiences with competitive
bidding since its implementation Jan. 1.

Attendees included bid winners in multiple categories, winners
in only one category and non-winners, “each with their own
perspective on the program, no one with a positive perspective,”
Schwinghammer said.

Blum started off the hour-long session with a single question:
“How do you think it is going?”

Provider Fino Randazzo of Florida Home Health Equipment &
Supplies in Orlando was the first to respond, Schwinghammer said,
telling Blum that he won a contract in oxygen but because he won in
only one category he was not getting any referrals.

After that, “It was just a layering and layering of the
problems. No one said anything positive about the program, even the
people who had won in all the categories,” Schwinghammer said.
“There wasn’t a grain of goodness you could take out of this, other
than the fact that [Blum] was there. His presence made it
significant. And it is a compliment to take the time.”

In an atmosphere that was characterized by attendees as
“respectful” and “calm,” providers brought up a host of issues
including “fundamental points about the cost of products,
unemployment, lack of calls to a majority of bid winners because
discharge planners only call those who won in each category, the
failure of subcontracting, suicide bids and more,” Schwinghammer
said.

One provider admitted submitting lowball bids because he thought
he could float his business “until this goes away,” Schwinghammer
said. “Now he doesn’t think he can survive.”

When Schwinghammer asked the group if anyone there was being
reimbursed at the rate at which they bid, no one was. The rates
were all lower.

“We’d like to know who set the bids,” Schwinghammer told
Blum.

Another notable issue, attendees said, came from a provider who
told Blum he had gotten a call on Monday from a hospital wanting
him to provide oxygen. He explained that as a non-bid winner he was
unable to service the patient. At 5 p.m. on Tuesday, he was called
by a company from out of state that had won a bid. Could he service
an oxygen patient so the patient could be released from the
hospital?

It was the same patient, who spent at least one day more than
needed in the hospital.

“If you look at a night’s stay in the hospital, it’s a year’s
worth of oxygen [at home],” said Lori Danford, director of
Wuesthoff Home Medical Equipment in Melbourne, Fla. “So they’re not
saving money.”

Danford said her company was the only one attending that was not
in Round 1, and she was struck by the fact that whether or not a
company won a contract, it was struggling to survive.

“They talked about suicide bids and how they really hurt
everybody,” she said. “You think that people who didn’t win the
bids are suffering, but the ones that won are, too. Patients are
suffering and businesses are going down. They are closing their
doors right and left.”

Another issue, according to both Danford and Gene Sego, owner of
Sego’s Home Medical with locations in Orlando, Titusville and
Clermont, Fla., was the lack of education about the program. Sego
noted that CMS was supposed to alert winning providers at least 90
days before implementation of the program. In reality, providers
were notified 32 days before — not nearly enough time to
educate everyone.

Those at the meeting said physicians, beneficiaries and referral
sources received little, if any, education about the program.

“No one knows how the program works or what the rules are or
where to get the equipment,” said Sego. “It’s doomed for
disaster.”

One of the key misunderstandings concerns repairs, he said.
“Repairs are not in the bid. Anybody can take care of it,” he said.
However, Medicare help line personnel are telling beneficiaries
that bid winners are required to do repairs. Sego, who won in every
category except mail-order diabetics, recently opted not to repair
a broken CPAP.

“It makes me look like I am not doing the right thing,” he said.
“I am fulfilling the obligations of this contract to the best of my
ability, but it makes it very hard when Medicare is giving
misinformation. It’s very hard on the beneficiaries and the
providers.”

Continued Sego, the third generation to operate Sego’s, “I like
this business. I like competition. That’s what America was founded
on. I think a lot of good companies are getting put out of business
by competitive bidding or audits — a lot of good, family-run
companies like mine that I know take good care of their patients.
[CMS is] making the patient suffer.”

He hopes that Blum got that message.

“I hope Mr. Blum hears some of our concerns if they want to make
this program work,” Sego said. “Right now, I don’t think it is
working very well for anyone.”

Providers at the meeting said Blum appeared attentive and
engaged, taking notes, and that he asked for suggestions about how
to improve the program.

“‘I know there are some issues out there,’” Schwinghammer said
Blum told him.

The FAHCS executive director said he has sent Blum an email
requesting another meeting to discuss achieving CMS’ goals “without
destroying the industry.”

Schwinghammer has no idea whether that will happen or what
Blum’s perceptions were of the meeting. Now, he said, “It’s up to
CMS to react.”

View more competitive bidding
stories.