Stabenow Questions Berwick on Competitive Bidding

WASHINGTON — As the industry campaigns for CMS to release
the names of providers whose bids were used to calculate Round 1
single payment amounts, Sen. Debbie Stabenow, D-Mich., sent a
letter to agency Administrator Donald Berwick on Monday questioning
a number of issues with the competitive bidding rebid.

A member of the powerful Senate Finance Committee, which
oversees Medicare, Stabenow told the recently appointed CMS chief
she is concerned about the problems that surfaced in the original
round of bidding (2008) and wants to find out what has been done to
fix them.

“Some bidders did not have the financial resources to ramp up to
deliver services to a larger number of patients. Many had no
experience in the product categories for which they were awarded
bids,” Stabenow wrote. Those are among the reasons Congress stepped
in to delay the program, she said.

“The healthcare community will again have very serious problems
if it turns out once more that these companies are unable to
provide sufficient access to quality items and services or do not
have the financial ability to operate under the new contracted
rates,” Stabenow concluded.

Those rates, averaging a 32
percent reduction, sent shockwaves through the industry. Many
stakeholders have predicted that even those who put in the low bids
won’t be able to sustain service under the steep cuts.

To view a sign-on letter from Reps. Jason Altmire, D-Pa., and
Ralph Hall, R-Texas, asking CMS to release the list of providers
whose bids were used to determine the Round 1 payments, see
Altmire, Hall
Call for Release of Bidder Names, Aug. 3. As of Wednesday
afternoon, the letter had gained 122 signatures from House
members.

The Aug. 9 letter from Stabenow follows in its entirety:

Dear Administrator Berwick:

I am writing today to ask for an overview of “Round One” for the
Competitive Bidding Program for certain Durable Medical Equipment,
Prosthetics, Orthotics and Supplies. Since Michigan has three
metropolitan statistical areas slated to be included in Round Two,
I am very concerned about whether Medicare beneficiaries’ needs
will be disrupted and whether there will be a sufficient number of
quality vendors to serve their needs.

During the initial Round One bidding process in 2008, a
significant number of providers who signed contracts could not
deliver services commensurate with their bids, and there were a
number of problems that surfaced later. Some bidders did not have
the financial resources to ramp up to deliver services to a larger
number of patients. Many had no experience in the product
categories for which they were awarded bids. It was for reasons
such as these that Congress was forced to act and delay
implementation of the program and required this re-bid.

Given these challenges in the first attempt at implementing
Round One, I would like to have more information regarding CMS’s
current efforts, including:

• What changes or improvements CMS has made as part of the new
  Round One?
• How have vendors’ concerns been incorporated into the new
  process? Will their feedback be incorporated into Round Two?
• Will there be sufficient time between Round One and Round Two
  to evaluate and address any problems before Round Two begins?
• What materials are being sent to beneficiaries about the
  “grandfathering” option and other changes?
• How are providers being notified about whether they will be
  able to participate? When will information be publicly available to
  see how the rates were determined? My understanding is that the
  names of the winning providers [will be announced] in September
  although CMS has already announced information on the bids’
  rates.

Thank you for providing me with an update on competitive
bidding. My goal is to ensure that qualified providers have been
chosen to provide these items and services to beneficiaries in
Michigan. Michigan hospitals, physicians and elders who rely on
home medical equipment services will be dependent on the
winning-bid companies for these critical in-home products. The
healthcare community will again have very serious problems if it
turns out once more that these companies are unable to provide
sufficient access to quality items and services or do not have the
financial ability to operate under the new contracted rates.

Sincerely,

Debbie Stabenow

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