He Said, She Said: Competitive Bidding Standoff

ARLINGTON, Va. — The American Association for Homecare
reported last week there is a growing body of evidence about
problems related to the Round 1 rebid of competitive
bidding, among them:

• Bankrupt bid winners;
• Errors on the Medicare.gov website providing misinformation to
  beneficiaries;
• Incorrect materials sent to beneficiaries outside of bidding
  areas instructing them to switch to contract providers;
• Lack of required state licensure among some bid winners;
• Long-distance providers among bid winners; and
• Contract provider credit problems.

“The association continues to collect examples of problems, and
we are making people on Capitol Hill aware of those problems,” said
AAHomecare’s Walt Gorski, vice president, government relations. “I
think there are some very legitimate concerns just in the run-up to
the start of competitive bidding, and if we aren’t able to stop the
program and it does start in January, there will also be an effort
to identify patient care issues if the program does become
operational.”

AAHomecare’s growing list of concerns comes on top of a warning to
CMS from 166 top economists that the bid program will fail, a
report from University of Maryland economist Peter Cramton that
shows at least
half or more of existing providers lost contracts in all nine
product categories, and a newly released analysis from Invacare
that found more than 20 percent of bid winners have some sort of
questionable financial situation (see “Invacare
Analysis Raises New Doubts about Bid Winners“).

The points raised by the recent studies are those that the
industry has been making all along, Gorski said. “We’ve been
looking at capacity, we’ve been looking at the clearing price,
we’ve been looking at transparency, and clearly CMS has been
unwilling to share any of this information. Therefore, you run into
issues such as what Invacare has found.”

After announcing Round 1
reimbursements in July, CMS had said it would announce the list
of contract suppliers in September. But that announcement didn’t
come until November, when the agency revealed the names of the
356
winning providers.

“Frankly, I thought the delay really showed where CMS said they
were doing additional scrutiny of suppliers,” Gorski said. “With
only 350 of them, I would assume that someone at CMS or its
contractor would have gone out to every single one of those places
and checked them out.

“It’s inconceivable to me that we have the issues we have
mounting now,” he continued. “Once referral sources start trying to
call these places and aren’t able to get service or hear that ‘it’s
not in my service area,’ unfortunately patient care is going to
suffer.”

But is anyone at CMS listening?

“I think these issues have raised doubts toward the program,”
Gorski said, “but at the same time, I do believe that the staff who
created this program think it’s going to work.”

That has resulted in a “he said, she said-type discussion,”
Gorski said. “We believe the facts are on the side of delaying the
start of the program so that providers in the initial nine areas
are not permanently harmed. But CMS officials believe the program
will work, so we are at a standoff.”

What would it take to change those CMS officials’ minds? Gorski
said that it will probably take independent verification of any
problems with the program after its implementation. “You can only
speculate so much,” he said, adding that “there is always
skepticism” when any health care sector or industry claims
problems.

“In this circumstance, I do think we are going to see problems
with faulty design,” Gorski said. “I would not be sleeping easy if
166 economists from every great educational institution around the
world questioned the program that CMS designed.”

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