ATLANTA--Industry stakeholders contacted by HomeCare Monday about CMS' proposed competitive bidding rule had a mixed response. Some said the rule contains unexpected details and others said it includes some surprises--but almost all said they simply need more answers.

"Two hundred and three pages and we still don't have those really critical facts known," said Miriam Lieber of Lieber Consulting, Sherman Oaks, Calif., referring to the lack of finalization of which cities and what products will be included in the initial bidding program. "Leaving so many variables undone makes it very difficult for people to plan."

"Under the category of surprises," according to Wallace Weeks of Weeks Group, Melbourne, Fla., among other things there are "the addition of a nationwide mail order competition, grandfathering, the undeveloped financial standards, a rebate program and allowing a physician to prescribe the brand, or mode of delivery."

And according to The Med Group's Don Clayback, vice president, networks, "you still have the big issues" of how CMS will calculate savings, how the agency will make sure there's a sufficient number of suppliers to meet the needs of the community, and "how the beneficiaries are going to make out at the end of this."

Said Clayback, "There is still the challenge of how you are going to prevent beneficiaries from having to deal with two or three companies for the same treatment: If someone needs a hospital bed, a wheelchair and a concentrator, theoretically they could have to deal with three different companies for that. And how that benefits the beneficiary, I'm kind of missing that point."

Additional comments from Lieber, Clayback and others, follow:

"My initial impression is that it left more questions than it answered, because the MSAs aren't identified, and the product categories aren't identified. It sounds like most of the information is going to be in the request for the bid."
--Sharon Hildebrandt, executive director, National Coalition for Assistive and Rehab Technology, Washington, D.C.

"I was not surprised that the NPRM did not identify the MSAs or the product categories subject to competitive bidding, but I was concerned about the methodology for picking the winning bid. CMS plans to determine how many suppliers it needs to meet the market capacity for the MSA and use that number to establish the cutoff for the winning bid. This has the potential to establish a winning bid cutoff that is lower than the mean or the median of all the bids."
--Asela Cuervo, Law Offices of Asela Cuervo, Washington, D.C.

"Unfortunately, there is still so much we do not know. We all know the genie is out of the bottle, but we don't know whose wish will be granted. As for me, I just do not believe the savings are there. It is going to be a monster to administer, and I think costly as well. At any rate, the time is over for complaining. Competitive bidding is coming, and we are going to have to figure out how to not only survive but to thrive."
--Mike Norby, senior vice president, medical sales, Mabis Healthcare/Duro-Med Industries, Waukegan, Ill.

"I am running the business as if we will be in the first round in 2007. I have had this approach since 2003 when the [Medicare Modernization Act] became law. My ongoing focus is to be the leanest and most efficient supplier in the area, while continuing to offer the best solutions for the right customer. I am also looking at ways to diversify my payer mix, including adding more cash sales. The HME business for me is a daily evolution."
--Cliff Woolard, president and CEO, Home Med-Equip Co., Concord, Calif.

"First, there is some definitive discussion about the use of gap-filling being used as part of the pricing strategy. With all the problems we have experienced historically and the ongoing discussions we have had with CMS, any use of gap-filling is likely to create some pricing aberrations that will be problematic for suppliers of those products."
--Tim Pontius, former chairman of AAHomecare and president, Young Medical, Maumee, Ohio

"As a card-carrying Medicare beneficiary who happens to know a little bit about the HME industry, I am frightened beyond measure at the idea that the oxygen therapy that allows me to enjoy life itself, the rehab technology that enables me to participate in life and community, and the ostomy supplies that help prevent life-threatening infections could all be supplied by the 'lowest bidders.'

"Knowing that something came from the lowest bidder would make me wonder what was compromised to enable them to reduce costs and still make profits. Are the equipment and supplies up to conventional standards? Has the time between delivery and expiration date for certain supplies been shortened? Are the people involved in providing important ancillary services properly trained? Can I be confident that the 'lowest bidder' will still be in business or, am I going to call for help only to find out 'the number you have reached is no longer in service?' Is the equipment provided what my physician prescribed or is it an item or items contained on the limited formulary the low bidder used to secure the Medicare contract?

"Reading that 200-plus pages of the NPRM provides no comfort that these questions have been asked, much less that CMS knows the answers."
--David T. Williams, former director of government relations for Invacare Corp. and industry consultant, Amherst, Ohio

"When you look at the methodologies that they're using to determine the items that will ultimately be included, I think it's really imperative that they use the latest available data possible just due to all the changes that this industry's been through since the MMA. Otherwise, they're really not going to have any reasonable data that's going to allow them to appropriately determine what products could potentially save additional money.

"We've had the FEHBP reductions, we've had a freeze in the updates, and the coding and payment initiatives that have been moving forward for other items are going to require CMS to look at all of those factors prior to determining what items should be included in competitive bidding and what savings--if any--could actually be achieved by including those items in a competitive bidding environment."
--Seth Johnson, vice president of government affairs, Pride Mobility Products, Exeter, Pa.

"We definitely need expert defending since what is actually a service industry is now being defined and described as a product industry. The hours we work, the diagnoses we work with and community/patient issues we deal with are not product-related.

"Will manufacturers one day be bidding on how well they can make a quality product at the lowest price ever? I am concerned that home care providers are being asked to make a bid that encompasses analyzing so many variables out of their control ... Can we control shipping costs, gas costs and manufacturing costs? Or how about providing health insurance to our employees? This must become a political issue, not just a bidding issue."
--Louis Feuer, president, Dynamic Seminars & Consulting, Pembroke Pines, Fla.

"Two hundred and three pages and we still don't have those really critical facts known. Leaving so many variables undone makes it very difficult for people to plan.

"Nonetheless, it looks like people need to gear up for giving it their best shot in terms of what kind of bid they would be able to do. Even if you're in New York, Chicago or L.A., it sounds like you should still continue to prepare because at some point they could find a way to carve back in some portions of these cities."
--Miriam Lieber, president, Lieber Consulting, Sherman Oaks, Calif.

"I believe it is good that they are excluding the three top MSAs and admitting that it would be difficult to administer the program in the largest population areas without first gaining additional experience. They propose criteria for selecting products that will be mostly cost-driven. It is important for providers to understand what services will be required, and that will not be known until the standards are released.

"They describe they will select the winning bidder on the weighted median of the bids, and this will remove some of the extreme outlier bids. There is some discussion about the need to give a grace period for providers who are not accredited and want to bid, but there is not a lot of detail on that or how they will grandfather those that are accredited.

"Overall, there is still a good deal of work that needs to be done."
--Thomas Ryan, AAHomecare chairman and president and CEO, Homecare Concepts, Farmingdale, N.Y.

"It's depressing reading it. It's depressing because they reiterate 'the greatest savings potential.' Every decision CMS is making is predicated on that principle."
--Cara Bachenheimer, vice president, government relations, Invacare Corp., Elyria, Ohio

"You still have the big issues: How are you going to estimate the savings? How are you going to make sure there is a sufficient quantity of suppliers to meet the needs of the community, and how the beneficiaries are going to make out at the end of this?

"There is still the challenge of how you are going to prevent beneficiaries from having to deal with two or three companies for the same treatment: If someone needs a hospital bed, a wheelchair and a concentrator, theoretically they could have to deal with three different companies for that. And how that benefits the beneficiary, I'm kind of missing that point. And then you tack that onto how much savings the government is really going to get. CMS is saying they want to have savings, but I think they need to have some formalized way of calculating those. CMS is also saying that their concern is to make sure of the welfare of the beneficiaries, but the [quality] standards have not been published yet and they're talking about a grace period for suppliers, so they may be including in the winning bids suppliers who have not yet been accredited.

"I think it gets to the point that this thing is moving way too quickly. CMS is already 18 months behind their original timeline. If the real concern is to implement this in a rational and logical way to minimize inconvenience to the Medicare beneficiary, they're really not going at it that way."
--Don Clayback, senior vice president, networks, The Med Group, Lubbock, Texas