Washington Action Reverberates at Medtrade Spring

Medtrade Spring attendees expecting a somber show and bleak industry forecast instead were re-energized as industry efforts in Washington, D.C., took a turn for the better earlier this month.

Even as the 4,000 participants — 2,600 of them providers, according to show officials — converged on the Long Beach (Calif.) Convention Center May 6, HME representatives were attending a hearing on Capitol Hill centered on competitive bidding. And that hearing, in which House Ways and Means Health Subcommittee Chairman Pete Stark, D-Calif., said he would try to block the program, led to a follow-up meeting with Stark's staff to discuss alternatives.

“AAHomecare chairman Alan Landauer is leaving here today for a meeting up on the Hill tomorrow … to discuss options for going in a different direction than competitive bidding,” association President Tyler Wilson told his audience during a May 7 update at the spring trade show.

Speaking before a packed room, Wilson offered a brief summary of the Ways and Means hearing, which included testimony from Kerry Weems, acting CMS administrator — who told the committee “there are no problems” with competitive bidding — and provider Tom Ryan, former AAHomecare chairman and CEO of Farmingdale, N.Y.-based Homecare Concepts, who spoke on the association's behalf.

After pointed questioning from committee members, Wilson said, the upshot is that “a whole bunch of important people are going to rethink this … We are building up political headwind.”

But getting rid of competitive bidding will take some doing, Wilson said, and it won't come without a cost.

CMS has already said it expects to save $1 billion annually through the DMEPOS bidding program, so the industry must come up with a way to save that money if the program is eliminated. Based on a Congressional Budget Office estimate of the cost of ending the program, Wilson said that means $6 billion might need to be cut from HME reimbursement over five years unless other alternatives surface.

Wilson quizzed providers on whether they would be willing to take an across-the-board reimbursement cut in return for competitive bidding “going away.”

A five-percent cut got an almost unanimous show of hands. A 10-percent cut drew about an 80 percent showing. At 15 percent, providers started grumbling, but there were still a plentiful number of hands in the air.

Reworking the program, however, did not appear to be acceptable. Audience member Cindy Justice, vice president and general manager for Melbourne, Fla.-based RespiCare of Central Florida, said she could not fathom redoing round one. “It just makes me sick to think about it,” she said.

“We don't want to have the program retooled if there is a chance of getting the whole thing thrown out,” Wilson said.

He noted the industry is working on multiple fronts to get at least a delay of competitive bidding. Already, two lawsuits have been filed, one in the Dallas CBA and one in Cleveland, and another is in the works. And legislators on both sides of the aisle have sent letters detailing serious problems with the program to Department of Health and Human Services Secretary Michael Leavitt and chairs of key legislative committees.

In addition, AAHomecare is ramping up the industry's visibility. Before the hearing, the association placed an ad challenging competitive bidding in Roll Call, a popular Capitol Hill newspaper.

Consumer media is also starting to take notice. An article on competitive bidding — in which Stark was quoted as saying he would like to see the program “scrapped” — appeared in the Wall Street Journal on the day the spring expo began, and the Washington Post reported on home oxygen cuts and service issues.

“The stars are beginning to align,” Wilson said.

While the Washington action offered providers a glimmer of hope, Wilson stressed there is much work yet to be done. “You have to craft a solution, get the legislation and the Senate and House together, then decide what vehicle it will move forward on,” he pointed out during the Medtrade Spring session.

To achieve any of that, providers must get involved in the process, he said. “We need our voices to be supported by yours,” Wilson said, urging providers to call or email their legislators to ask for a delay in the bidding program.

News of the action on Capitol Hill buzzed around the halls of the convention center and on the show floor, with many providers saying an across-the-board cut would be better than the 26 percent average savings CMS has said it would gain from competitive bidding.

Even a 15 percent cut would be better, according to Cindy Riemer Wolf, COO for Diabetic Care Services in Eastlake, Ohio. Her company, a national diabetic mail-order business, bid in that category in all 10 CBAs in round one and lost in every market.

“I'm very angry about this,” Wolf said. “We take care of 125,000 people. We've been doing this for 11 years.”

Wolf said she resents the providers who won bids because at the 43 percent pricing reduction that resulted in the category, “they have removed the service component from what we do. And all the folks who have won are not our competitors. Our competitors all lost. These people [who won bids] haven't even done this before.”

She worries that patients will suffer because there will be no one to look out for them. So, while 15 percent would be a tough cut, “we'd swallow it and go,” Wolf said.

So would Jae K. Kim, C. Ped., CDF.

“They drop the fees based upon their research and we will follow,” said Kim, president of Life Med Medical Supplies & Equipment in Los Angeles. “Why do we have to take bidding? This is stupid.”

Mark L. Sangree, vice president and general manager of RespiCare of South Florida in Deerfield Beach, said elimination of round one would be better than its delay or redoing. He could live with the cuts, he said, but the best thing would be “to require accreditation but have a free marketplace.”