Stark Plans Bill to Delay Competitive Bidding; It’s Crunch Time for HME

WASHINGTON–Rep. Fortney “Pete” Stark, D-Calif.,
chairman of the House Ways and Means Health Subcommittee, is
expected to introduce a bill as early as this week calling for a
delay of Medicare’s DMEPOS competitive bidding project,
industry insiders said last week.

But the only way for such a proposal to gain traction is for the
home medical equipment industry to exert as much pressure as
possible on members of Congress to back the bill, stakeholders
said.

At a hearing called by his subcommittee May 6, Stark labeled the
bidding program “somewhere between flawed and lousy” and said he
would work with the industry on an alternative.

“We expect Mr. Stark to be introducing a bill [this week].
He is committed to a speedy consideration of the bill, but whether
they are able to attach it to a Medicare package that goes to the
Senate or whether it goes on its own, it will need significant
support,” said Cara Bachenheimer, senior vice president,
government relations, for Elyria, Ohio-based Invacare.

Bachenheimer said HME providers must continue to make their case
for a delay in implementation of the CMS project by citing its
numerous flaws and the resulting devastation to beneficiaries, as
well as to the industry.

“CMS is not going to budge without, literally, an act of
Congress,” Bachenheimer said. “We’ve just really
got to increase the noise level across the country,” she
emphasized. “Every senator and every representative needs to
hear from their constituents … This is crunch
time.”

News of the impending bill follows weeks of intense industry
efforts to inform Congress about the lengthy list of problems with
the program, which is set to be implemented July 1.

Among a multitude of issues, questions have surfaced on the
integrity of the bidding process; allegedly improper bid
disqualifications; unclear provisions regarding subcontracting;
beneficiary access; protection of small business; accreditation and
licensure; and the quality of service bid winners with no
experience in the product category will be able to render to
patients.

To press those and other concerns, the American Association for
Homecare sponsored a fly-in May 21 that sent 160 stakeholders to
see legislators on Capitol Hill. The same day, the House Small
Business Subcommittee on Rural and Urban Entrepreneurship held a
hearing on competitive bidding that AAhomecare said raised
“grave doubts about CMS’ claims of improved accuracy,
savings for taxpayers, fairness to small businesses and ensured
access and quality for beneficiaries.”

A clinician call-in the following day–with participation from
some 20 advocacy and clinician groups–registered more than 1,500
calls to legislators asking for a complex rehab carve-out from
competitive bidding.

In addition, letters citing serious concerns about the bidding
program and asking for its delay have been sent not only by
industry members but by members of Congress themselves to key House
and Senate committee chairs, CMS and Department of Health and Human
Services Secretary Michael Leavitt.

While all of this is positive, stakeholders warned this is not
the time to back off.

“The next three to four weeks are very critical,”
said Tyler J. Wilson, president of AAHomecare. “This is not
the time for people to pat themselves on the back and say, ‘I
went to the fly-in and now let’s just sit back and let the
process go on.’ We have to continue to make our voice heard,
make sure the beneficiaries know what they will face if this goes
through. Keep up the pace, keep up the pressure. We are in a
critical phase here.”

Wilson said the industry is calling for a one-year delay of
round one and 18 months for round two of competitive bidding.

“The goal of the delay is not just delay for delay’s
sake,” he said. “It’s designed to give Congress
time to reassess whether competitive bidding is the best mechanism
for home medical equipment.”

With implementation of the program just a month away, he noted,
“there continue to be a lot of problems. Nuts-and-bolts
issues have not been properly addressed by CMS and all … the
unanswered questions and the failure of CMS to do adequate
education is going to come together in a morass [of
problems].”

Even as industry power-hitters were talking to lawmakers and
government officials, more problems were surfacing, this time
related to CMS’ announcement of the round one bid
winners.

On May 19, CMS released the names of 325 contract winners in the
first 10 competitive bidding areas. CMS officials said contracts
were offered to 23 percent of the providers submitting bids. They
also noted that about 50 percent of the contracts went to small
suppliers, those with revenues of $3.5 million or less. (See

HomeCare Monday Special Alert, May 19.)

After analyzing the information, however, stakeholders
questioned not only CMS’ figures but also raised numerous
other questions.

“The biggest concern is the licensure issue in Ohio and
Florida, where there are more than a handful of providers who
don’t appear to hold licenses in the state,” said
Bachenheimer, referring to the two states’ requirement that
home oxygen suppliers be state-licensed (see “Oxygen
Licensure Is Issue for Some Bid Winners” in this issue).

Under competitive bidding rules, winning bidders must be in
compliance with all applicable laws, Bachenheimer said. If some
providers are unlicensed in areas where licensing is required, she
said, “then those bids should have been thrown out on that
basis alone.”

CMS has sidestepped questions on that issue by pointing to the
fact that the companies are accredited, according to Julie Piriano,
director of rehab industry affairs for Quantum Rehab, a division of
Pride Mobility Products, Exeter, Pa.

“All the companies are accredited,” she said.
“The real issue is that [accrediting organizations] were
directed to assess companies for accreditation based on quality
standards; however, the quality standards are still in draft
form.

“That’s where the concern comes in,” she
continued. “None of the accrediting organizations has a tool
with which to work to assess the companies they were
assessing.”

Another concern, Piriano pointed out, is that 155 standard power
wheelchair providers received contracts but only 31 of them won
complex rehab contracts as well. That means, she said, that a
beneficiary using a standard chair who needs to ratchet up to a
custom rehab device very likely would not be able to work with
his/her current provider.

The provider with the standard wheelchair contract but no
complex rehab contract “would need to refer it out, and that
beneficiary would need to start the process all over again with
somebody different,” Piriano said, adding that shift could
impede service times.

She noted there are three major “worry areas” where
this could likely happen: the Pittsburgh, Kansas City and Miami
CBAs.

“There are only four complex rehab providers in each of
those markets,” she said.

Piriano also said there are concerns that some providers who
were awarded complex rehab contracts have never serviced that
segment before.

“There are some basic competency issues,” agreed
Bachenheimer. “[Many] providers did not win in their core
competency; they lost in their core competency.”

As well, there are educational issues. In call-ins to CMS and in
other forums, providers have pressed the agency on when and how it
would educate beneficiaries on the coming changes, particularly
since there are only a few weeks left until the program takes
effect.

“It’s an expectation coming from CMS that we will
indeed help educate beneficiaries,” said Wilson. “But
our efforts have to be complemented in a significant way with
efforts from CMS.

“There are just a lot of unanswered questions,”
Wilson continued. “Unlicensed contractors being awarded
contracts, questions about capacity; questions about providers who
don’t have a history of providing products in a certain
category, questions about providers that are new to a geographic
area.”

There are so many unanswered questions, he said, that
competitive bidding cannot be allowed to move forward.

However, Wilson and others are fully cognizant that if the
industry is successful in getting a delay, it will need to somehow
pay for the savings CMS says it would have reaped under competitive
bidding.

“How do you pay for that delay? The offset that we have
offered in a measured way until we know what the numbers really are
is that this industry would be willing to look at an
across-the-board cut in DME depending on the size of the cut
needed,” Wilson said. “We’re willing to give
something back in order to stop the clock.”

While providers won’t know what size cut they have to come
up with until that information is released by Congressional Budget
Office, Wilson said the offer of an across-the-board cut was made
with the stipulation that “this would be the only cut this
year to DME. We are not willing to talk about additional cuts in
the oxygen benefit and power mobility,” both of which have
been on the table in recent months.

As the legislative push for delay gains momentum, Wilson said
AAHomecare is also pursuing probable legal action.

“While we continue to press on the legislative front, we
are examining and really setting in motion what we need to do to
pursue a court challenge to competitive bidding,” he said.
“HHS has not met its statutory mandate and has not done the
things they were required to do.”

The association is working with the Washington law firm of
Sidley, Austin to compile the necessary data to pursue an
injunction that would halt implementation of both rounds one and
two, he said.

Already, one injunction against competitive bidding is being
sought by Cleveland-based Walter & Haverfield LLP, which is
handling a lawsuit backed by Last Chance for Patient Choice, an
educational entity created by Waterloo, Iowa-based VGM to fight
competitive bidding.

Whether legislatively or legally, whatever happens has to happen
fast.

“We’ve got three to four weeks to get this
resolved,” said Bachenheimer. “This is no time for a
vacation.”