Disaster Watchdog Questions Implications of Competitive Bidding

MIAMI — Complaints concerning the problems with competitive bidding have been
ringing from the rafters recently, but a release from national
disaster watchdog the Disaster Accountability Project last week is
questioning the program’s outcomes from a different perspective
— that of disaster preparedness.

“The issue for us is not competitive bidding so much as it is
the rules in the competitive bidding process and how many bids are
selected,” explained DAP founder and Executive Director Ben
Smilowitz. “From our perspective, we are more interested in making
sure there is an adequate supply. Our issue is not on competitive
bidding in general, it’s on the impact,” he said.

Smilowitz said DAP, founded after Hurricane Katrina to keep tabs
on the nation’s disaster prevention and response systems, became
concerned when the organization found that, of approximately 501
oxygen providers in Miami-Dade County, only 44 were offered
contracts. In the event of a disaster — specifically Miami’s
infamous hurricanes — Smilowitz questions whether those
providers would be able to cover the entire MSA in the case of an
emergency.

“We’re not saying that 501 is a great number, and [CMS’]
concerns of reducing the number of suppliers may be completely
legitimate, but 44 seems like a drastic change — especially
for supplies which are required to save lives,” Smilowitz said.

“With two South Florida MSAs located in hurricane alley, the
Riverside-San Bernardino-Ontario [California] MSA located in an
earthquake zone and the importance of disaster preparedness
everywhere, the issue of significantly fewer oxygen distributors
presents some major concerns for us, looking at the issue with a
disaster accountability lens,” he said.

Rob Brant, CEO of North Miami Beach-based HME City Medical
Services and president of the newly founded Accredited Medical
Equipment Providers of America (AMEPA), said the threat of natural
disasters in MSAs in Florida, California and the Midwest are a real
concern when it comes to competitive bidding. It was an AMEPA
member who first contacted DAP about the issue, he said.

“Having lived through [Hurricane Wilma], that was one of the
arguments we had when Miami was chosen as one of the MSAs. We
realized this was going to be a big problem,” said Brant, who
recalls having to drive over 100 miles during the 2005 hurricane to
purchase gasoline and medical supplies for patients who were
without power and transportation.

According to Brant, between 2004 and 2005, the state of Florida
recorded five major storms that were rated as Category 3 or above
— meaning that five big reasons CMS should reevaluate its
competitive bidding process may just be Hurricanes Charlie, Ivan,
Jeanne, Dennis and Wilma.

While CMS has not issued the names of bid winners in round one,
Brant said he believes Apria and Home Medical to be two of the
winning bidders in Miami. “Apria and Home Medical are located on
the same street,” said Brant, noting that geographic proximity is a
major factor in a natural disaster. “God forbid the winning bidders
get taken out in the storm. Then where are the patients going to be
able to get their oxygen service from?”

This is specifically the question being asked by DAP. In a post
on its Web site, DAP poses the following questions: Did Medicare
consider disaster scenarios at all when executing this bidding
process? Were post-disaster surge capacity needs considered when
Medicare limited the number of winning bidders in each MSA?

“With this issue, we’re asking questions as to whether
considerations for disaster planning were included in the bidding
process. We think that CMS needs to answer these questions,”
Smilowitz said.

“Is there a plan in place for the distribution of DME like
oxygen after a disaster? And how will significantly fewer
distributors be able to serve public need after a disaster when as
many as half of the distributors (or more) may be off-line for
weeks — as was the case after previous storms? Without
adequate supplies after a storm, individuals that depend on oxygen,
for example, may overwhelm emergency rooms causing further drain to
resources and a large expense to the public,” Smilowitz said.

He added that disability groups and disaster planners should be
involved in the competitive bidding selections process.

“If FEMA was consulted, if Craig Fugate (director of the Florida
Division of Emergency Management) was consulted and they found that
this was OK, I would like to see how they came to that conclusion,
and I think the public deserves to see that information,” Smilowitz
said. “This bidding process could affect a lot of people in a very
dangerous way, so these questions need to be answered.”