Medicare Compliance & Reimbursement

Durable medical equipment suppliers seem to be gaining traction in their fight against Medicare competitive bidding, but will it be enough to stave off the industry-threatening program?

DME suppliers have been waging a major grass-roots campaign aimed at stopping or at least delaying round one of competitive bidding, which starts July 1.

Supplier groups like the American Association for Homecare and the National Association of Independent Medical Equipment Suppliers have submitted to lawmakers petitions with thousands of signatures calling for a bidding delay, submitted letters urging bidding action, placed an ad in Roll Call decrying the program, and organized supplier fly-ins to lobby members of Congress.

Oxygen patients have roamed the halls of Congress to persuade their representatives. Numerous suppliers and DME users have visited lawmakers at home and in Washington, DC, to press their case to end or delay bidding.

Suppliers point to the high rate of disqualified bids as one of the many flaws in the program. The Centers for Medicare & Medicaid Services says it disqualified 4,874 of the 6,209 bids submitted for round one, according to the Dallas Morning News. More than 3,000 of those were for missing documentation or lack of accreditation.

Lawmakers, take notice: That was one of the many issues raised May 6 in the House Ways and Means Health Subcommittee's hearing on bidding. Committee members including Chairman Pete Stark (D-CA) took CMS Acting Administrator Kerry Weems to task for bidding's implementation problems.

Weems said CMS staffers spot-checked 100 disqualifications and that they were all correct. Committee members seemed irritated when Weems would admit no faults in the program and would offer no suggestions for improvement in future rounds, attendees say.

Former American Association for Homecare head Tom Ryan detailed a long list of problems with the program in his testimony before the committee. "This Medicare bidding program is a train wreck. But as this program jumps off the tracks, the attitude of CMS is clearly 'full steam ahead,' " said Ryan, now CEO of Homecare Concepts in Farmingdale, NY. "The bidding program is poorly conceived and fundamentally flawed."

Also, suppliers that CMS requires to be accredited can use unaccredited subcontractors, says the National Association for Home Care & Hospice.

Before the hearing, Stark told the Wall Street Journal he might want to entirely "scrap" the program. During the hearing, Stark asked Ryan whether suppliers would take a Medicare rate cut in exchange for halting the bidding program. Ryan indicated yes.

Industry reps generally agree that "an across-the-board fee cut would be a much more acceptable way to save money for Medicare than going forward with the flawed competitive bidding process," NAIMES says. "This would leave the supplier community intact."

General Accounting Office officials also testified at the hearing. They acknowledged that bidding could save Medicare money but would require significant oversight to avoid quality and access problems. "Continued monitoring of beneficiary satisfaction will be critical to identify problems," the GAO says in an analysis of the program.

The hearing gave momentum to suppliers' advances with lawmakers. "Acting Administrator Weems said nothing today to alleviate my concerns about CMS' competitive bidding program," Rep. Jason Altmire (D-PA) said in a release after the hearing. "There is still ample evidence that this program is unfairly forcing small medical equipment suppliers out of the marketplace." Altmire called for a six-month delay to bidding's onset while problems are sorted out.

The hearing was "a victory for the industry," NAIMES says in a member update. But whether the industry's efforts can stop the bidding process is uncertain. Suppliers have another chance to raise the issue during the May 19 House Small Business Committee hearing.

Besides CMS' intent to roll out bidding nationwide, other payers are already showing signs of adopting bid prices for DME, NAIMES says.

The GAO's findings are at http://www.gao.gov/cgi-bin/getrpt?GAO-08-767T.