WASHINGTON — Bruce Levinson, senior staffer for the Center for Regulatory Effectiveness, a regulatory watchdog organization, is wondering what CMS is hiding.
During a March 10 Open Door Forum for home health, hospice and DME, Levinson posed a question about the financial standards the agency is requiring bidders to meet in the DMEPOS competitive bidding project. The bid window for the Round 1 rebid closed in December, and the program is set to be implemented in January 2011.
"When will [the Department of Health and Human Services] be specifying those standards?" he asked.
"If you could submit an email, that would be great," a CMS representative replied, giving out the address for Joel Kaiser, director, CMS Division of DMEPOS Policy.
Levinson emailed Kaiser and other CMS staff members that afternoon. As of March 18, he was still waiting for a response.
Even a petition from the CRE to CMS to release the financial standards has elicited no response. On Wednesday, CRE head Jim Tozzi went on the record about the issue at a meeting of the Program Advisory and Oversight Committee at CMS headquarters in Baltimore.
That the agency hasn't released the financial standards it plans to hold bidders to is puzzling at the least, Levinson said.
"Why is CMS doing this? What about this competitive bidding program are they doing that is so — I hate to use the word 'wrong' — but what are they trying to hide?" he asked. "Why is CMS handling it in this sort of odd manner, one that does not allow for transparency?"
'Something Out of Kafka'
Last year, Levinson pointed out, President Obama issued an "open door directive" that called for transparency throughout government agencies. "CMS does not seem to be adhering to the spirit of that [directive]," Levinson said.
The bidding program "is not open, it is not fair and it is ripe for abuse. It's not because of the HME companies; CMS is creating a situation ripe for abuse" since any company can be eliminated because of unstated standards, Levinson said. "This is the very antithesis of what Congress and the president want to accomplish.
"This is not something out of Congress," Levinson added. "This is something out of Kafka. [Bidders] are required to meet these standards, but they are not allowed to know what they are. And you are punished for not complying because you're not given a contract."
CRE has another concern about CMS' DMEPOS competitive bidding program, Levinson said, because small businesses that do not win contracts will be shut out of the program. Levinson said CRE has asked CMS to allow small providers ("small" as defined by the Small Business Administration) to participate in the Medicare program if they accept reimbursement prices that result from the bid. However, CMS has indicated it wants to cut back on the number of DME providers in Medicare.
The way the current program is structured, Levinson said, is "against everything the president has said." It would kill hundreds of small businesses, cost thousands of jobs.
"The secret financial standards seem to be another way to close the small providers out," Levinson said.
The HME sector of health care, he continued, "is one of the few businesses that touches most people that is not too big to fail. CMS appears determined to turn this industry into a too-big-to-fail industry like Wall Street. There is no reason why they cannot allow small vendors to participate at the single-payment amount."
Which circles back, he believes, to the question of why CMS is operating the competitive bidding program in a non-transparent fashion.
"Not releasing financial standards, making a pretense of asking the PAOC for advice, putting pressure on small companies — what is CMS hiding?" Levinson asked. "Someone needs to take a look at how CMS is administering this … There's a real problem here."
'I'm Staying Alive'
Levinson also pointed out that it isn't just providers and HME stakeholders who are complaining about competitive bidding. Every day, the CRE hotline receives calls from beneficiaries, and Levinson listens to them all.
"The beneficiaries care about this, they are frightened and they are angry," he said. The calls are posted on the CRE Web site (www.thecre.com/Forum/), where visitors can also hear the actual recorded calls or leave their own comments. Of the hundreds of calls CRE has received, Levinson noted, he has not heard one that favored competitive bidding.
"We have had a number of people saying online, 'I understand you have to save some money,' but I have not heard any support for this program," Levinson said, noting that CRE has sent some 60 to 70 of the calls to CMS.
"We have told CMS about this. They have to hear this," he said.
Levinson himself was surprised at "how devoted beneficiaries are to their suppliers," he said. Callers from all over the country, both men and women, some in good health, some in very poor health, have called in to object to competitive bidding and, in many cases, laud their suppliers. Levinson has heard stories of providers coming out in snowstorms to deliver equipment and showing up when the power goes out to ensure their patient is OK.
As one caller from East Chatham, Conn., said: "This company has been great with me since I got released from the hospital. I spent a long time now on a machine. I'm alive. I'm staying alive. I have a positive attitude towards life, and this company has been very good with me … Don't put the small companies out of business."
Said Levinson, "There is no reason to put the small businesses out [of the program]. Until they allow small businesses to participate — all the qualified small businesses — I think there will be a cloud over CMS, and they are not going to have the trust of the beneficiaries."
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