BALTIMORE—All is well. That was the word about Round 1 of
competitive bidding from the Centers for Medicare and Medicaid
Services at last week’s meeting of the Program Advisory and
Oversight Committee.

After all, agency representatives said, of the 54,000 calls the
1-800 Medicare line has received about competitive bidding, only 43
were complaints.


“There seems to be a very large disconnect that CMS has no
problems,” said Walt Gorski, vice president of government
relations for the American Association for Homecare and a member of
the PAOC. “We look at it as 54,000 people calling in to
express concerns—and only in nine competitive bidding areas.
Imagine what is going to happen as the realities of competitive
bidding set in and there is a ten-fold expansion in the next

Cara Bachenheimer, senior vice president of government relations
for Invacare and a former PAOC member, said it was unclear what the
54,000 represented—all competitive bidding calls from the
nine areas or other Medicare calls, as well?

She noted that the way CMS defined a “complaint” was
also murky. “Their definition of … a
‘complaint’ is not the same as ours.”

According to AAHomecare, CMS classifies some contacts, which can
include calls about difficulty finding a contract provider or
switching to less expensive equipment, as

In any case, Bachenheimer said, “[CMS’] mission is to
prove to Congress that everything is great, everything is rosy;
they paint this perfect picture. Why would they have to change

CMS created the PAOC, required under the Medicare Modernization
Act, to give input on the implementation of competitive bidding.
But committee members have often been vocal in their criticism of
the agency program, saying that although the committee's name
indicates they have oversight powers, they don’t, and while
they are to function in an advisory capacity, CMS seldom takes
their advice.

The agency’s description of Round 1 as going fine was a
typical example, attendees at the April 5 meeting said, and they
weren’t buying it.

PAOC member Tom Milam, former COO of diabetic supply company AmMed
Direct, disputed the evidence CMS used to support its “all is
well” theory. In a presentation of results from real-time
claims tracking, CMS charted users of oxygen, CPAPs and diabetic
supplies, among others, and the percentage of whom, over four
years, used the DME benefit, had been hospitalized, had an
emergency room event and/or had died.

“By design, the numbers were flattened,” Milam said. In
the oxygen group, for example, “the denominator that they
were using was not the number of beneficiaries diagnosed,” he
said. “I want to see what is happening to my current O2
users, my current CPAP users. This was misleading.”

Gorski pointed out that problems arising from lack of quality of
care or equipment—increased emergency room visits, doctor
visits and hospitalizations—may not develop immediately. It
is “clearly too early to tell,” he said.

Added Bachenheimer, “You are not going to see these impacts
for months and potentially years. That’s the kind of stuff
you don’t capture immediately. It’s like you
don’t see people going out of business right away; it’s
going to be a slow bleed.”

While the agency did announce at the meeting that it would
delay Round 2
by six months, Gorski said that was not enough
time for the foundational changes in the program that need to be
made. “For example,” he said, “if they wanted to
address median pricing or calculation of the single-payment amount
or capacity issues, those are things that would require CMS to open
the rule.”

Generally, he said, it takes months for CMS to issue a proposed
rule, allow for a 60- or 90-day comment period, publish the
comments and then post the final rule. “The fastest this has
occurred was with the physician fee schedule payment,” Gorski
said. That came about in five months, what he called
“breakneck speed” for CMS.

“When 95 percent of the people in the room suggest that the
program needs to be changed, it is surprising that CMS remains
steadfast in its Round 2,” he said.

Bachenheimer also said she saw no softening of CMS’ rigid
stance on competitive bidding.

“I urge people not to read too much into the six-month
delay,” she said. “CMS is still very adamant that the
program is working smoothly in the initial nine bid areas; this
does not signal anything from CMS that they are ready to make any
meaningful changes to the bid program. Even with the revised
timetable, there is no time for CMS to open up the bidding final
rule and make substantive changes—which is a necessary step
in the process if CMS were to really consider making any

Even as CMS was painting its blissful picture of Round 1, PAOC
members heard of one casualty: Miami provider Rob Brant told the
committee he will be shuttering his 14-year-old business because of
the effects of competitive bidding. (See “PAOC Speakers Give
Different View of Competitive Bidding” in this issue.)

Brant’s comments, which drew applause, Milam said,
underscored the deep fissures in the CMS project. Still, he said,
he detected a “different tone” compared with previous
PAOC meetings.

“CMS was quieter than in the past,” Milam said.
“They actually said they wanted to hear what the PAOC thinks.
In prior meetings, it was, ‘This is what is going on’
and ‘This is what we are getting ready to do.’ There
was less of that.”

While CMS representatives did not respond to any comments, Milam
said he hoped they were at least starting to hear the concerns
about the national bidding program. “I would love to see
… leadership at CMS say it is time to do it right,” he
said. “We need to see a change here.”

That directive will only come from legislation, Bachenheimer said.
“We know that no amount of pleading is going to make CMS
change it on their own.”

For more on CMS’ revised competitive bidding timeline, see

Round 2 of Competitive Bidding Delayed
, HomeCare Monday
Special Alert,
April 5.