BALTIMORE — Industry representatives said they left Thursday's meeting of the Program Advisory and Oversight Committee cautiously optimistic that their concerns about the myriad issues surrounding national competitive bidding had been heard.
There was, however, no doubt that CMS is intent on implementing the project, they said.
"I thought the meeting reviewed a number of important issues related to the operation of the program," said Walt Gorski, vice president of government relations for the American Association for Homecare and a PAOC member. "I think we have a way to go, but clearly, the tone of this meeting was a step in the right direction.
"Keep in mind that CMS has no discretion. They have to move forward with this program under the mandate of Congress," he pointed out, noting that only Congress can repeal the bidding project.
The 17-member PAOC was formed to advise CMS on the restart of the bidding program, with Round One now set to be implemented in January 2011 (see top story). The bidding window will open this fall.
The meeting included information on how CMS believes it has improved the online bidding system; program requirements and bidder responsibilities; financial documentation; licensure, accreditation and subcontracting requirements; new supplier issues; and mail order for diabetic testing supplies.
Seth Johnson, vice president of government relations for Pride Mobility Products, Exeter, Pa., said he, too, was somewhat encouraged by the session.
"Overall, I thought that Jonathan Blum, the new director of [CMS' Center for Medicare Management], set the right tone and made it clear that the new administration wants to work with the industry in an open and collaborative manner," Johnson said. Blum chaired the all-day meeting.
Cara Bachenheimer, senior vice president of government relations for Elyria, Ohio-based Invacare, was more cautious in her assessment.
"The PAOC did a really good job of pulling out some of the fundamental things CMS needs to address," she said. However, she added, "It's difficult to tell if CMS is going to take the PAOC seriously. That's a question mark. It is very much an outstanding issue whether CMS is willing to resolve what consumers and providers see as fatal flaws in the program."
While a number of serious issues remain, the meeting showed the agency at least seems open to hearing the concerns, other stakeholders said.
PAOC member Doran Edwards, MD, of Advanced Healthcare Consulting in Columbia, S.C., said the agency is working to elevate the caliber of bidders by requiring that they be licensed in the state where they are bidding to provide services before they place their bids. He also noted the bidding process should be more user-friendly. And he hopes some low-ball bids will be eliminated by requiring back-up documentation such as invoices and also by prohibiting the transfer of contracts when winning bidders sell their businesses.
New providers bidding for an area where they have never had a presence before will have some added restrictions, Edwards said. In addition to being accredited and holding a surety bond (both of which are required of DMEPOS providers by Sept. 30 and Oct. 2, respectively), they must be licensed where required, provide a plan of care and show they can handle the workload.
"These are all positive steps, and these are improvements that need to be done," Edwards said.
Serious Issues Unresolved
Several critical issues that have not been resolved relate to awarding contracts to providers who have no experience in that product category or no presence in a competitive bidding area, and how CMS determines capacity for the CBAs."[The PAOC] clearly felt very strongly that you can't possibly award a contract to someone who has no experience in that area," Bachenheimer said.
During a public comment period, the point was hammered home by provider Rob Brant of City Medical Services in North Miami Beach, Fla., who told the group that someone new to the CPAP business, for example, would likely formulate a bid based only on what the equipment costs.
A bidder unfamiliar with sleep therapy would not take into account the total cost of providing the services, Brant explained, noting that only a provider experienced in providing CPAPs — those who are "learning to live with" Medicare's new policies — would understand all the requirements, which now encompass multiple patient visits.
Another point of controversy was the financials requirement.
According to Brant, the PAOC "raised the issue about three years of financials being reduced to only one," he said. "The PAOC felt that this will allow unqualified companies without long-term history the ability to continue to place unrealistic low bids in order to win and make a name for themselves in the marketplace or to sell their business."
But the day's central discussion focused on capacity, said meeting attendee Dave McCausland.
"Certainly the most discussed, debated and contentious topic of the day was 'capacity,' how CMS calculated capacity and how much a winning bidder could really grow and in how long. A major point of concern was situations where a winning bidder had little if any history for a specific product, within a specific competitive bidding area, and they were believed, assumed, expected to manage 20 percent of the market capacity," said McCausland, senior vice president of planning and government affairs for The ROHO Group, Belleville, Ill. That's "not really reasonable," he said.
At question is how CMS calculated capacity in the initial Round One. The agency determined the number of winning bidders based on their stated capacity to grow their business, but stakeholders have argued the numbers of providers who won contracts to service the CBAs were way too few.
"They miscalculated the number of providers needed to service the beneficiaries in the competitive bidding area," Johnson said. "They didn't have enough to fill up the capacity bucket."
During the comment period, McCausland suggested that CMS establish a minimum threshold "of demonstrated, historic capacity within the pool of bid winners, just like they have a threshold for a minimum percentage of small provider winners."
Capacity "remains an issue to explore," said AAHomecare's Gorski, adding that and numerous other issues related to access and quality could be addressed as the PAOC meets again in the summer.
Johnson said CMS official Joel Kaiser noted the competitive bidding Interim Final Rule addressed only those changes stipulated under last year's Medicare Improvements for Patients and Providers Act; the slowed timeline for Round One allows CMS to work with the industry.
In that time, Johnson said, "clearly, providers need to continue to educate their legislators on the negative impacts of competitive bidding and the effect on the beneficiaries they serve. That advocacy effort needs to continue."
Working with the industry is what the PAOC intends to do, Edwards said. "We will try to remove the landmines before all this rolls out," he said.
But Bachenheimer said she hopes the program will never roll out. "Nothing is set in stone as far as I'm concerned," she emphasized. "Obviously, we want to get rid of the program."
An overview of the PAOC and a list of committee members are available on the CMS Web site.
