ARLINGTON, Va. — On Friday, the American Association for Homecare sent a letter to Health and Human Services Secretary-Designate Tom Daschle and chairmen of key congressional committees urging them to review and rescind CMS' new interim final rule on competitive bidding.
"We view the bidding program as a bureaucratic, anti-competitive price-setting system that will have the unintended consequences of reducing quality of, and access to, care for patients. Defying the spirit of transparent and open government, this bidding program was rushed into implementation in the 11th hour of the Bush administration without regard for the negative impacts it will have on seniors and home care patients," wrote AAHomecare President Tyler Wilson.
But getting that message across will take some effort, observers said, especially since Congress continues to hear from bureaucrats who point to competitive bidding as a way to save the government a substantial amount of money. Congressional Quarterly reported that on Wednesday, Alice Rivlin, former head of the Congressional Budget Office and the White House Office of Management and Budget, urged the Senate Budget Committee to curb entitlement spending growth by using tools such competitive bidding for HME. Rivlin said that "with all due respect it was 'ridiculous' of lawmakers to halt competitive bidding," according to the report.
That prompted Wilson to respond that "it would have been ridiculous to continue that bidding program, which was a disaster for patients and providers alike, which is why Congress wisely reformed and delayed the program. Moreover," he continued, "the home medical equipment sector more than paid for the full savings that the flawed bidding program was projected to have saved through the 9.5 percent cut that took effect earlier this month. And the durable medical equipment sector is growing at just 0.75 percent per year despite growing demand."
The full text of the association's letter to Daschle, which was also distributed to national media outlets, follows:
Dear Secretary-Designate Daschle and Committee Chairmen:
On behalf of the nation's providers of home medical equipment and services, the American Association for Homecare urges you to rescind the last-minute rule issued by the Centers for Medicare and Medicaid Services (CMS) regarding the competitive bidding program.
On January 15, 2009, in the final hours of the Bush administration, CMS submitted to the Federal Register its interim final rule on the bidding program for home medical equipment, or durable medical equipment (DME), expected to take effect on February 17, 2009. While the issuance of interim final rules is generally reserved for health care emergencies, this clearly was not such a case. Instead, the process was corrupted to push through a Bush Medicare program in the 11th hour of the administration — defying the spirit of transparent and open government.
We sincerely appreciate the new Administration's actions to suspend and review pending federal rules, as detailed in the White House Chief of Staff memorandum issued on January 20, 2009. We hope that you will exercise the option outlined in this memo and review and rescind this rule, which was rushed into implementation without regard for the negative impacts the program will have on seniors and home care patients in America. As it stands, the "competitive" bidding program will actually reduce competition, along with health care quality and access to care for patients and seniors.
The bidding program would selectively contract home care providers based solely on lowest cost, forcing out providers who utilize high-quality homecare equipment or provide critical patient services. The quality of, and access to, care for patients will be threatened due to forced cutbacks in homecare services. These cutbacks will also increase the length and cost of hospital stays as the number of home medical equipment providers shrinks.
As you know, Congress delayed the bidding program because it believed the initial roll-out of the program in 2008 had disastrous results for the four million patients affected and for the hundreds of providers, mostly small businesses, that were needlessly excluded from Medicare as a result of the first round of bidding. The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) required that several reforms be incorporated into the bidding program. MIPPA addressed several near-term concerns with the program, but thoughtful and deliberate rulemaking by CMS was clearly anticipated by Congress, given the overwhelming level of Congressional and stakeholder concern during initial implementation. Under these circumstances, it would be much more appropriate for CMS to have published a proposed rule, ensuring that comments received during the comment period would be taken into account before any final rule is published.
We strongly disagree with the statement by CMS in the interim final rule that MIPPA "did not alter fundamental requirements contained in the competitive bidding program statute and regulations or revise the methodologies used by us in calculating payment amounts and selecting suppliers under the program." Because Round One of the competitive bidding program was fraught with procedural and operational flaws, the new rule raises serious questions about due process, fair selection of providers, and patient access to quality care. In its rule, CMS has done the absolute minimum to comply with the statute, which affects health care for millions of beneficiaries.
Additionally, the home care community has expressed its interest in working with CMS to review the mechanics of the bidding program. However, CMS has not capitalized on the only existing mechanism, the Program Advisory and Oversight Committee (PAOC), to seek or incorporate feedback. In fact, after MIPPA was passed, CMS disbanded the PAOC, which was created to provide the agency with concrete, real-world guidance on the development and implementation of the bidding program.
We view the bidding program as a bureaucratic, anti-competitive price-setting system that will have the unintended consequences of reducing quality of, and access to, care for patients, as well as competition in this sector by eliminating the vast majority of qualified homecare providers that currently compete for patients on the basis of quality and service. This bidding program is similar to a closed-model HMO and will have the effect of government-mandated consolidation in the home care sector.
Home medical equipment and care (durable medical equipment) is already the most cost-effective slowest-growing portion of Medicare spending, increasing only 0.75 percent per year according to the January-February 2009 issue of Health Affairs. That compares to more than 6 percent annual growth for Medicare spending overall. Home medical equipment represents only 1.6 percent of the Medicare budget.
Because this issue has been mischaracterized repeatedly, it's worth mentioning that the home medical sector was subjected to a deep, 9.5 percent reimbursement cut (effective January 1, 2009) as a part of MIPPA in order to "pay for" the savings the bidding program has been projected to save. It should also be noted that our Association recommended an aggressive 13-point anti-fraud program last year in order to help the federal government prevent criminals from participating in Medicare. However, the bidding program, a price-setting mechanism, should not be confused with anti-fraud measures.
We ask for a review of the rule and rescission of the rule in order to allow the affected patients and providers the deserved opportunity to voice their concerns about the program.
Sincerely,
Tyler J. Wilson
President, American Association for Homecare