WASHINGTON--Home medical equipment providers from around the country got a reality check last week from CMS Acting Deputy Administrator Herb Kuhn.

Speaking at the American Association for Homecare's Legislative Conference, Kuhn told the group that CMS is moving toward full implementation of competitive bidding and will enforce its final rule on the program--mandated by the Medicare Modernization Act of 2003--as it stands.

"We're thinking about round two already," Kuhn said, adding that "what we learn in doing this first round will be absolutely essential for us as we make refinements for round two." He emphasized that providers in the initial 10-MSA roll-out must act now to get their bids in and to get accredited.

Because CMS is working on a "fundamental transformation" from being a passive payer of claims to an active purchaser of health care, Kuhn said, the agency is looking for value in the dollars it spends. That means focusing on prevention, pay for reporting, pay for performance, transparency, cost-effectiveness--"and yes, it also means competitive bidding."

While one provider said he thought Kuhn had done an "eloquent job of sugarcoating" competitive bidding, the message was not exactly what most attendees at the association's annual lobbying conference said they wanted to hear. An estimated 225 providers and industry advocates traveled to the nation's capital to push Congress for support of H.R.1845 and S.1428, companion bills that would ease some effects of the national bidding program.

Under the final rule, only providers that win contracts will be able to provide DMEPOS bid items to Medicare beneficiaries. The proposed legislation would allow qualified providers that had submitted bids to continue serving Medicare patients at the single-payment rates that are set.

In a question-and-answer period after Kuhn's June 6 speech, a provider asked whether Kuhn favored the legislative efforts, telling the CMS official he thought competitive bidding would "bring this industry to its knees and as a result put in jeopardy the patients we serve."

Kuhn responded that the agency has not taken an official position on the legislation. "What we're committed to right now is implementing the MMA and the competitive bidding program as part of the law," he said.

To another question on CMS' view of shortening the current oxygen rental cap from 36 to 13 months, Kuhn answered, "Nothing's changed on that ... that's still the administration's position on oxygen right now. We're part of the administration."

And asked why power mobility was included in the first round of bidding--on the heels of massive coding, coverage and payment changes in the sector--Kuhn said CMS' charge was to "really look at where the areas are we could have the greatest impact." After reviewing the volume of power mobility claims, he said, "we thought that it was absolutely appropriate for [power mobility] to be included in competitive bidding."

But many conference attendees complained that the bidding program is being rushed to implementation following a rule more than three years in the making. After release of its final rule April 2, CMS opened the first-round bid window on May 15 and has scheduled its close July 13. (See HomeCare Monday, May 21.)

If the current time frame for the program is maintained, providers pointed out, data from the first round of bidding won't be analyzed before the second round begins.

Several attendees said they hadn't really expected to hear anything different from Kuhn. "There are lots of questions about competitive bidding, and not enough answers and not enough time," said one angry provider, who asked not to be identified. "I give Mr. Kuhn credit for showing up--that took some courage--but he's lucky he got out of that room alive."

Also at the conference:

--Douglas Holtz-Eakin, Ph.D., former director of the Congressional Budget Office and economic policy director for the McCain 2008 presidential campaign, labeled competitive bidding as a "recipe for disaster." The economist said competitive bidding will keep new companies from getting into the market, thereby lessening competition.

An AAHomecare issues summary echoed that interpretation. "We believe in fair competition. But the Medicare competitive bidding program eliminates competition and it will reduce patient access to home care, the most cost-effective setting for health care in America."