Shuler Calls on Congress to End Competitive Bidding

News

WASHINGTON — At a congressional hearing yesterday,
Rep. Heath
Shuler, D-N.C., called for an end to national competitive
bidding.

Shuler convened the hearing of the House Small Business
Subcommittee on Rural Development, Entrepreneurship and Trade,
which he chairs, to discuss the effects of the Medicare bidding
program on small business. During the hearing, he noted,
the majority of DMEPOS suppliers are small businesses but the
“bidding program allowed many of the small suppliers to be outbid
by larger, less knowledgeable firms.”

CMS implemented Round One of the program July 1, but Congress
delayed it two weeks later after an outcry from HME
stakeholders. Passage of the Medicare Improvements for Patients and
Providers Act July 15 ended the contracts that had been signed for
the first round and made some changes to the program.

But in the waning days of the Bush administration on Jan. 16,
CMS published an interim
final rule to ramp the bidding program back up. The IFR was
scheduled to become effective Feb. 17. On Feb. 6, however, CMS
announced the agency was considering a 60-day delay under the
Obama
administration’s instructions to review any regulations that
had not yet taken effect. Comments on delay of the IFR are due
today.

“In the next two months, the administration will review —
and hopefully eliminate — the competitive bidding program
altogether,” Shuler said.

Several independent HME providers who bid in Round One testified
at the standing-room-only hearing, which dovetailed with a Capitol
Hill lobby effort sponsored by the American Association
for Homecare.

Georgie Blackburn, vice president of Blackburn’s in
Tarentum, Pa., testified on behalf of AAHomecare that the bidding
program is actually anti-competitive because it clears the
marketplace of competition by reducing the number of eligible
providers that can serve Medicare beneficiaries. “It will eliminate
90 percent of the home care providers — typically small,
family-owned businesses — in any marketplace where it is
implemented, “she said.

Blackburn also told the committee a program “whose primary
selection criterion is product price represents a ‘race to the
bottom’ that will jeopardize quality and access to care.” She said
her company, located in the Pittsburgh MSA, had a “learning curve”
of several years on some aspects of home oxygen delivery. But
companies “that had no experience providing patients with a product
category or were not located in the MSA were offered winning
contracts,” she said.

Bill Griffin, president and CEO of Griffin
Home Health Care in Charlotte, N.C., said his company has been
providing home health care in the area for 25 years. Testifying on
behalf of the North
Carolina Association for Medical Equipment Services, Griffin
told committee members he won no contracts in five categories in
Round One because his bids were too high. “The fact that we were
told that our prices were too high is a very clear indication that
many providers/suppliers ‘bid to win’ rather than bid so as to
fulfill the commitment of the bid contract,” he said.

Other witnesses testifying at the hearing included Gerald Sloan,
CEO of Progressive
Medical Equipment in Lenexa, Kan., testifying on behalf of the
Midwest Association
for Medical Equipment Services; Rob Brant, owner of City Medical
Services in North Miami Beach, Fla., and president of the
Accredited Medical
Equipment Providers of America; and Wayne Stanfield, president
and CEO of the National Association of Independent Medical Equipment
Suppliers. Dr. Alan S. Routman of Ft. Lauderdale, Fla.,
testified on behalf of the American Association of Orthopaedic Surgeons.

CMS Defends the Program

CMS was also represented at the hearing. The agency’s Laurence
Wilson, director of the Chronic Care Policy Group, said the bidding
program “is expected to reduce beneficiary’s out-of-pocket costs
and ensure their access to high-quality DMEPOS items and services,
bring Medicare’s DMEPOS payments in line with current market
pricing and combat supplier fraud, which is expected to result in
taxpayer savings of billions of dollars.”

He also noted that CMS set a 30 percent target for small
provider participation in the bidding program and added that
“results of the contracting process for the previous Round One were
that 64 percent of all contract suppliers” were considered “small”
because they generated annual revenues of $3.5 million or less.

When Shuler asked why CMS had published an interim final rule
rather than a proposed rule, which would have allowed time for
public comment, Wilson said that the bidding program had been
subject to thousands of comments when it was first proposed.

He also said CMS plans to issue additional information about the
bidding program in coming months, including a timetable for the
Round One rebid process.

After the hearing, Rep. Blaine Luetkemeyer, R-Mo., said the
subcommittee would draft a letter to Small Business Committee
Chairwoman Nydia Velazquez, D-N.Y., and possibly recommend
legislation.

For the complete testimony of the hearing witnesses, click
below:

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