Mrs. Lerner Goes to Washington

Levinson apparently agreed with that latter. "Enrollment has been a fundamental flaw for many years," he said. "When our investigators went to Florida [some years ago] and banged on doors — or tried to bang on doors because in some cases there were no doors to bang on — they found that one-third of 1,600 DME providers that had numbers didn't meet the most basic standards like having a physical location, having regular hours. So it is quite clear that it is too easy to gain access. Solving that enrollment issue would greatly deter fraud."

There was no follow-up to Levinson's comments. Blackburn felt there should have been.

"I would have liked the testimony and the questioning to tear that issue apart, noting that CMS is in charge of the contract process with the National Supplier Clearinghouse, which admitted to not having enough staff to complete their due diligence when granting provider billing numbers," she said. "I would have liked to hear CMS' reasons for contracting again with the NSC after the admission."

Gorski also took issue with that segment of the hearing.

"I think the biggest issue with fraud and abuse is that the government witness panel took no responsibility for allowing these providers into the program to begin with," he said. "You don't give a broom closet a provider number if you adequately did a site inspection. How does that happen if CMS and its contractors are doing their job?"

Provider Rob Brant, owner of City Medical Services in Miami and president of the Accredited Medical Equipment Providers of America, pointed out Levinson's assertion did not reflect the new HME scenario that now requires accreditation and surety bonds.

"There was a panel of people from CMS, OIG and GAO who had a lot of old information prior to the implementation of the surety bond and mandatory accreditation, which cut in half the number of oxygen providers in Miami and Los Angeles," he said. "They keep talking about easy entry to this industry, but that no longer exists.

"I have CMS visiting my office every two to three weeks, which is normal for South Florida these days," Brant continued. "This whole story of things that happened years ago with fake storefronts is now irrelevant. It's been almost a year since mandatory accreditation and the surety bond were put in place."

Just Set Reasonable Fees

Subcommittee member Rep. Christopher Murphy, D-Conn., posed another question about the bidding program.

"What are the reasons to go to competitive bidding rather than coming up with a more reasonable fee schedule?" he asked Wilson.

Wilson gradually made his way to an answer. "The program is pretty unique for Medicare," he said, adding that there were competitive bidding demonstration projects before the final project. "There are not many other examples that would be even close to this type of program. This program has a unique set of challenges when it comes to fee schedules. There is a lack of information on true costs."

In the end, while stakeholders said they wished more industry representatives — particularly those from Round 1 MSAs — had been invited to testify, many said the hearing was a good foundation to build on: Rep. Pete Stark, D-Calif., chairman of the House Ways and Means Subcommittee on Health, is expected to hold another hearing on the bid program after Congress returns to Washington following the November elections. (See accompanying sidebar.)

"A lot of very good, very strong arguments were made," said PAMS' Shirvinsky. "We clearly have a steep hurdle to get over, but this is not over by a long shot. We have clearly made enough noise — strong points, strong arguments — that this program is going to cause untold and unjustified damage to this industry sector."