Home Health & Hospice Week

Legal challenges also fail to hold off the paradigm-shifting program.

Despite positive indications that Congress would delay the onset of competitive bidding for durable medical equipment, the program took effect as scheduled July 1. But suppliers aren't yet ready to call it quits on ending the program.

"Already the problems are flying and we are only 4 hours into the day," exclaimed Wayne Stanfield with the National Association of Independent Medical Suppliers on July 1.

The bidding program took effect because the Senate failed to vote on pending Medicare legislation. That was despite lots of bipartisan support for both the bidding delay and the physician payment fix that is the focus of the legislation.

Besides letting bidding take effect, the delay may cost suppliers precious momentum in their fight to hold off the program. And it gives nay-sayers a chance to criticize a delay.

For example: Editorials in The New York Times, USA Today and the Atlanta Journal-Constitution all press Congress to let the bidding program go forward as scheduled.

The delay passed by the House is a victory for special interest lobbyists, the Times charges. And the complaints about the program from suppliers "sound like sour grapes from companies whose prices were too high to compete," the Times adds in its June 25 issue.

The House-passed delay is a "great example of how a small group of constituents can potentially beat back a policy that's clearly in the public interest," says Times columnist David Leonhardt. Failing to institute bidding would be "corporate welfare," he adds.

"Companies that provide hospital beds, wheelchairs, walkers and other items to Medicare patients have had a sweet deal," agrees the USA Today editorial. Medicare payment rates "can be astonishingly generous."

The delay should at least be shorter, says the Atlanta Journal-Constitution. "If reforms are needed, they can surely be implemented in less than 18 months," the newspaper claims.

Suppliers are fighting back against this negative sentiment for a bidding delay. "Congress is trying to fix a broken bidding program that, unless improved, will improperly exclude thousands of qualified home care providers from Medicare--and reduce competition," the American Association for Homecare's Tyler Wilson says in the USA Today. "The proposed improvements would still save billions and preserve quality."

"I am all for competition as a way to assure top quality services and equipment at fair prices," maintains Jean McAdams, owner of Community Home Medical Equipment in Baraboo, WI. But "having the federal government selectively eliminate competitors by a new complicated bureaucratic procedure that inevitably leads to the creation of a near monopoly of giant suppliers willing to supply the cheapest equipment and lowest level of services is not the way we want to serve Medicare seniors," McAdams says in a release from Sen. Russell Feingold (D-WI).

Five Bidding Lawsuits Tank

Legal challenges have also failed to halt bidding. Most recently, a federal court in Washington, DC shot down a request for an injunction in a lawsuit filed by AAHomecare. The plaintiffs didn't prove irreparable injury, claimed federal judge Ricardo Urbina.

"While we are disappointed that the court did not grant a preliminary injunction, we are encouraged that the court did not bar our claim on jurisdictional grounds," says Tyler. "In the days and weeks ahead, we will press for a summary judgment from the court."

A Cleveland, OH federal court also denied an injunction in another bidding suit, Premier Medical Supplies v. Leavitt (see Eli's HCW, Vol. XVI, No. 44-45). The suit didn't prove that its challenge to Centers for Medicare & Medicaid Services rules and regulations could succeed, report plaintiffs' attorneys at law firm Walter & Haverfield in Cleveland.

The decision marks the fifth defeat of a bidding suit. "This has been a national effort across the country and was the last hope for a delay before the July 1 start date," notes attorney Michael J. Jordan in a release.

Hope remains: The Cleveland court didn't grand the injunction, but it also hasn't dismissed the case, note the Walter & Haverfield attorneys.

Efforts continue: While the bidding implementation deadline has passed, suppliers have not given up hope on getting the program delayed.

In addition to the pending legal challenges, suppliers are still working on their elected representatives to include a bidding delay in the finalized Medicare budget legislation that will likely come together in the next few weeks.

AAHomecare is gathering complaints about the bidding system online. Forms for providers and beneficiaries are online at www.aahomecare.org.

"The issue is not dead,' AAHomecare maintains. The "Senate will debate Medicare again after the July 4 recess."

Learn New Bidding Ropes

Meanwhile, CMS has been issuing lots of new information about bidding, including:

• New billing modifiers. DME suppliers in competitive bidding areas (CBAs) must use eight new modifiers on claims to obtain payment for bid items, according to June 25 Transmittal No. 1544 (CR 6007).

"New HCPCS modifiers were developed to facilitate implementation of various policies that apply to certain competitive bidding items," CMS explains in the memo. They "are pricing modifiers that suppliers must use to identify when the same supply or accessory HCPCS code is furnished in multiple competitive bidding product categories." (For modifier details, see chart, p. 187.)

The transmittal also reviews policies such as mandatory assignment and billing for capped rental items. It's online at www.cms.hhs.gov/transmittals/downloads/R1544CP.pdf. A MLN Matters educational article about the new rules is online at www.cms.hhs.gov/MLNMattersArticles/downloads/MM6007.pdf.

• Grandfathering. Non-contract suppliers in bid areas should have already let their customers know whether they were going to furnish bid items under bidding's grandfathering clause, noted a CMS official at the June 25 Open Door Forum for home care and DME. About 90 percent of suppliers have indicated they will do so, reports the National Association for Home Care & Hospice.

Suppliers must remember that enteral nutrition is not subject to grandfathering, CMS says in a notice to suppliers.

• Mail order. CMS has clarified some definitions regarding mail order supplies under bidding. A "common carrier" is a company that transports DMEPOS to a beneficiary. "This means that suppliers that pay a common carrier such as the U.S. Postal Service, Federal Express, United Parcel Service, or other shipping or courier service companies to transport diabetic testing supplies to Medicare beneficiaries' homes must be mail order contract suppliers," CMS says. That's "regardless of any contract arrangements suppliers may have with common carriers to deliver these items.

Suppliers only count as "local storefront" entities if their own W2 employees deliver the supplies. "This local storefront supplier must have its own local storefront that services the competitive bidding area, have its own location-specific National Supplier Clearinghouse (NSC) number for that storefront, bill for the diabetic supplies using that NSC number, and meet all of Medicare's supplier standards," CMS maintains. "It must also offer beneficiaries the choice of either obtaining the diabetic supplies from the supplier's storefront or having the items home-delivered by the local storefront supplier using its own vehicles and W2 employees."

 • Ombudsman. Suppliers can find the contact information for their bidding ombudsman at the Competitive Bidding Implementation Contractor's Web site at www.dmecompetitivebid.com, CMS noted in the forum. The ombudsman can give out general bidding information, help locate a contract supplier, and provide assistance with bidding-specific questions.

• Bidding data. Suppliers can find "look-up amount" payment rates for bid items, files of CBA zip codes and 26 new frequently asked questions and answers at the CBIC Web site. The zip code files have now been separated into mail order versus regular bid items. There's also a contractor supplier tool on www.medicare.gov, CMS noted in the forum.

 • SNFs. A new tip sheet for skilled nursing facilities joins the other five tip sheets CMS has already issued about bidding. The other tip sheets at www.cms.hhs.gov/DMEPOSCompetitiveBid include those for referral agents, grandfathered suppliers, mail-order suppliers, physicians and non-contract suppliers.