Home Health & Hospice Week

Delay of bidding looks likely, thanks to new bipartisan legislation.

DME suppliers may get a breather on bidding, but it will come at a high price.

On June 12, legislators in the House introduced a bipartisan bill to delay durable medical equipment competitive bidding for 18 to 24 months. Senators introduced a companion bill on June 17.

"The Bush Administration designed this program with blinders on to the needs of beneficiaries and the small companies that make up most of the DME industry," said bill sponsor Pete Stark (D-CA), Chair of the House Ways and Means Health Subcommittee.

"This bill provides us with the time to get the program right and ensure we are reducing costs while protecting beneficiaries in the long run," said co-sponsor and subcommittee ranking member Dave Camp (R-MI) in a release.

"The competitive bidding program ... should stay on hold until it's certain that seniors will get the products they need in a way that works for them," said Senate Finance Chair Max Baucus (D-MT) in introducing the legislation.

The bill "will help prevent many small home medical equipment suppliers from going out of business," says Senate Finance ranking member Charles Grassley (R-IA) in a release. "That's especially important in states such as Iowa that are reeling from floods and tornadoes."

Ouch: But the break suppliers would get on bidding would come at a serious price. The bills call for a 9.5 percent reduction to Medicare payment rates for bid items to pay for the delay.

"As I told the industry from the start, this is no free lunch," Stark said. "This bill requires the DME industry to finance the cost of delaying the program." Stark asked industry representatives at a May hearing if they would accept a rate cut in exchange for a bidding delay.

Suppliers and industry reps initially called for a smaller rate reduction. The National Association of Independent Medical Equipment Suppliers estimated a 4 percent reduction would pay for the delay adequately.

The Scooter Store based in New Braunfels, TX called the 9.5 percent offset "excessive." Because power mobility device rates saw an average 27 percent cut in 2006, "we urge Congress to consider a smaller reduction in this particular category," the PMD supplier said in a release.

But NAIMES and the American Association for Homecare are backing the bills and calling for supplier support. "This bill is critical to making important improvements to Medicare policy that will protect America's seniors and people with disabilities who depend on home medical equipment and services in their homes," says AAHomecare's Tyler Wilson in a release.

"The DME industry can now almost breathe a sigh of relief," cheers NAIMES CEO Wayne Stanfield. The bills boost "the chances of a delay in this bad public policy by leaps and bounds."

Bills Call For New Accreditation Requirements

The bidding legislation proposes a lot more than just a simple delay to rounds one and two of competitive bidding. And even the delay itself is complicated. The bills call for a complete cancellation of round one contracts with rebidding in those areas. The new contracts would take place in 18 to 24 months.

The bills would prohibit round two contracts from taking effect until 2011. The 9.5 percent cut to bid items would start in January 2009.

New standard: The legislation would also require all DME suppliers to be accredited by 2009. This provision would "ensure that all suppliers, whether they are billing Medicare directly or are a subcontractor to another supplier, be subject to accreditation," according to a Senate Finance Committee summary of the bill.

The bills also would require a wide-ranging revamp of the bidding process, including the Centers for Medicare & Medicaid Services notifying bidders of paperwork problems and giving them time to rectify them and the HHS Office of Inspector General verifying bid prices.

The bidding delay legislation has garnered unprecedented support from lawmakers, industry veterans note. The Senate Finance Committee release contains endorsing statements from no less than 10 senators, an unusually high number.

But passage isn't guaranteed. NAIMES urges suppliers to continue contacting their representatives to keep the pressure up.

Watch for: If the House and Senate pass identical bills, the legislation can go straight to the President to be signed into law, NAIMES notes. President Bush is expected to approve the measure.

Meanwhile: CMS continues to crank out bidding documents in preparation for the July 1 round one deadline. The agency has released a second phase of chapter 36 for the Medicare claims processing manual. The new changes include information on payment rules, change of suppliers, traveling beneficiaries, beneficiary liability and downcoding.

CMS also plans to issue letters to beneficiaries about bidding "later this month," it says in a message to suppliers. Observers wonder whether benes would receive the letters before bidding begins.

Note: Copies of the beneficiary notices are online at www.cms.hhs.gov/PressContacts/10_PR_DMEPOS.asp.