BALTIMORE--Supplier quality issues dominated conversation during last week's three-day meeting of a 22-member panel advising CMS on DME competitive bidding. Members of the Program Advisory and Oversight Committee spent nearly an entire day on quality standards, which many have stressed are key to carrying out a successful bid program.

According to several panel members, the meeting was the PAOC's last before CMS rolls out a massive proposed regulation on the what's, how's and where's of DME competitive bidding this summer. Under the Medicare Modernization Act, bidding is slated to begin in 10 top metro areas in 2007. The upcoming proposal will detail how these areas will be selected, how bids will be taken and how winners will be chosen, along with the criteria CMS will use to choose products for the bidding program.

Also mandated by MMA, suppliers must meet quality standards to participate in the bid. Those standards, which will be enforced by accrediting bodies, are still to be determined by CMS. The agency plans to release the quality standards in a separate program memorandum this summer.

"CMS is making a good-faith effort to implement quality standards," said Cara Bachenheimer, vice president of government relations for Elyria, Ohio-based Invacare Corp. and a member of the PAOC. "Most of us have been arguing very strongly this needs to happen--or the bottom is going to fall out."

Bachenheimer and other panel members say that if quality standards do not precede the bidding program, companies with the lowest level of service and lowest cost component could win, leaving players with higher standards and service levels as losers.

A draft of what quality standards might look like was presented to the committee by North Carolina-based RTI (Research Triangle Institute), a contractor assisting CMS with program implementation. The overview drew heavily from material used by current industry accrediting bodies, including the Joint Commission on the Accreditation of Healthcare Organizations (JCAHO), the Community Health Accreditation Program (CHAP) and the Accreditation Commission for Health Care (ACHC).

Proposed company standards focused on eight topics: organizational structure; financial management; human resources; patient and client management; assessment and evaluation of quality standards; facility and patient environment and safety management; ethics and rights; and information management.

"[RTI] did their homework," Bachenheimer said. "They hit all the key areas."

Important points that need to be considered include looking at the supplier as a health care provider and business operation, according to committee member Asela Cuervo, a Washington attorney representing the American Association for Homecare. "Is there an annual budget? Are employees given training? These are things you would expect to see in a good solid business," she explained.

CMS said it will follow an aggressive timeline to finalize quality standards and choose accrediting bodies--though some on the committee argued that the agency should recognize suppliers who are already accredited. "I think pretty much everyone was in agreement that CMS needs to look at a grandfather clause or transitioning policies," said committee member Seth Johnson, director of government affairs for Exeter, Pa.-based Pride Mobility.

According to a CMS official, the agency is giving "strong consideration to the possibility."

Dr. Don Vliegenthart, a panel member and medical director for Sarasota, Fla.-based Hoveround, said the committee is urging CMS to release a final rule on grandfathering soon, but added that shouldn't keep providers from holding off on accreditation plans. "I think providers working in this business should be accredited now," he said. "Now that it's part of the law, I don't see what you'd be waiting for."

Beyond the discussion of standards at the meeting, CMS heard from panel members on how to calculate payments and ways to ensure small providers can participate in the bidding program. The agency must determine whether small companies can bid as part of a network, according to some panel members. For more input on the issue, CMS officials said RTI will form focus groups of 40 to 100 small providers throughout the country.

For further information, including notes and presentations from past PAOC meetings, visit CMS' DME competitive bidding Web site by clicking here.