Bid Briefing Redux — Not: Opponents to Tell Their Side

WASHINGTON — Former Connecticut Rep. Nancy Johnson and
Professor Peter Cramton will present a congressional staff briefing
on competitive bidding
tomorrow, and industry stakeholders hope it will reveal the picture
they see of the program’s devastating effects.

At a May 10 briefing on Round 1, CMS officials told
congressional staffers the program was going fine and that the
agency had received “virtually no complaints” — only 43 out
of 54,000 calls.

But “unlike last week’s briefing to members of Congress by
Medicare, this meeting will be from the point of view of a noted
economist/bidding design expert, HME providers and an oxygen
patient,” according to a message from the Accredited Medical
Equipment Providers of America.

Called “Competitive Bidding Congressional Update — What
You Need to Know,” the briefing will be introduced by Rep. Sue
Myrick, R-N.C. In addition to Johnson and Cramton, the University
of Maryland economist who has repeatedly warned that CMS’ bidding
design is “fatally flawed,” panelists invited to speak include:

• Tom Milam, a member of the Program Advisory and Oversight
  Committee and former COO of AmMed Direct;
• Barbara Rogers, PAOC member, president/CEO of the National
  Emphysema and COPD Association and an oxygen user;
• Paul Gabos, CFO of Lincare and Round 1 rebid winner; and
• Rob Brant, owner of City Medical Services, North Miami Beach,
  Fla., also a Round 1 rebid winner.

Brant, president of AMEPA, said he is looking forward to
relating his experiences; he closed his company at the end of April
even though he won a contract for oxygen in the Miami competitive
bidding area.

“This is an opportunity as a bid winner and somebody who closed
their business [to tell legislators] that Medicare is not being
truthful with Congress,” Brant said Friday. “They are getting
information from CMS and, in their minds, it is accurate and
truthful and the program is working well and saving money, so let’s
move forward.

“The truth of the matter is, I had to close my business because
I only won one contract. I couldn’t do hospital beds, CPAP, enteral
supplies, diabetic supplies — that’s why I had to close my
business.”

Speaking in April at Cramton’s mock
auction — intended, the economist said, to show how a
“well run” auction would work — Lincare’s Gabos questioned
the Round 1 process and prices. Of the 73 bids it entered, he
noted, Lincare won only two.

“Needless to say, we were shocked when we saw the results
… prices down 25 to 40 percent in some of these categories,”
Gabos said. “You know, when we see prices down 25 to 40 percent and
then understanding that those prices are based on median prices so
that half of the winning bidders actually bid less than that, you
really start to question the integrity of the bid process.”

A number of bid winners were looking to get out, he added.

“We have been inundated with requests by winning contract
providers to purchase their companies,” Gabos said. “It’s very well
known that Lincare, a very well-capitalized company, did not win a
significant number of contracts. I can tell you that we have
confidential information from over 30 companies that have won bids,
and we’ve been contacted by at least twice as many as that.

“I can tell you that these companies are broke … they were
broke before Jan. 1, and they’re even more broke now,” he
continued. “Some of these companies are not able to take new
patients until an existing patient comes off service because they
can’t buy a new piece of equipment.”

Brant said he is well aware of the difficulty some beneficiaries
have had in finding new providers.

“CMS says it has had 54,000 inquiries and only 43 complaints,”
he said. “Well, I have several hundred patients who are still
looking for new providers since we closed our doors in April and
they can’t find one. I am sure they are part of the 54,000 patients
making ‘inquiries.’ When this program expands in Round 2,
proportionally they are going to have over a million ‘inquiries’
and they won’t be able to handle it.”

Brant said he is hopeful that his comments and those of the
other panelists will move legislators to back H.R. 1041. Introduced
in March, the competitive bidding repeal bill currently has 98
cosponsors in the House but no companion bill in the Senate.

Commented Seth Johnson, vice president of government affairs for
Pride Mobility Corp., “I hope the … briefing will continue to
raise awareness of the fundamental flaws with the Medicare bidding
program and compel Congress to act in a more direct manner.”

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