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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