WASHINGTON — "If you understand the fundamentals of competition, it is easy to see that the Medicare competitive bidding program is anything but competitive … You cannot eliminate 80 or 90 percent of competitors and expect to arrive at a competitive outcome," said John Shirvinsky, executive director of the Pennsylvania Association of Medical Suppliers.
"The program is already leading to a fast race to the bottom in terms of quality and access to health care. Services related to home medical equipment are being reduced or eliminated in response to artificially low prices caused by market dysfunction," said AAHomecare President Tyler Wilson.
"Good providers will find it unprofitable to remain in business. Home medical equipment provision is so service-intensive, and the bidding program payment so low due to suicide bidding, that the entire system may become unsustainable," said provider Georgie Blackburn of Tarentum, Pa.-based Blackburn's.
"It appears [CMS] is wedded to the structure of this program and advancing it at all costs, rejecting the advice from the Program Advisory and Oversight Committee, requests for information from Congress to make the program more transparent and recommendations from 167 of our nation's top economists and auction experts," said Pride Mobility's Seth Johnson, vice president of government affairs.
Those are a few of the points about national competitive bidding that congressional staffers heard from HME advocates at a March 1 briefing called by Pennsylvania Reps. Glenn Thompson (R) and Jason Altmire (D).
The idea was to help make sure legislative staff, especially freshman members, learn about the bidding program, said AAHomecare's Michael Reinemer, vice president, communications and policy. Stakeholders are hoping to get a new competitive bidding repeal bill introduced before the association's Washington Legislative Conference, which begins March 16.
"The two hosts this morning are key champions on that front," Reinemer said Tuesday.
In Congress' last session, H.R. 3790, which would have repealed the entire bidding program, gained 259 cosponsors but failed to make it out of committee. The industry is working to float the measure again before Round 2 of the program moves forward. The catch is finding the funds to offset a repeal of the bid system, which CMS estimates could save $17 billion for Medicare.
No matter what, Wilson told the Capitol Hill staffers that "the bidding program designed by CMS is faulty, and its administration has been a lesson in poor planning, arrogance and clumsiness." He added that the agency has been "alarmingly dismissive" toward a number of issues in the two-month run of Round 1, including difficulty finding local providers to get DME.
"The only way to stop the problems is to stop the program," Wilson said. "We urge Congress to step in and enact legislation to repeal bidding. If Congress fails to act, the economic fallout and the harm to the home care system and those that rely upon it will be irreversible."
Blackburn noted CMS required only one year of financial data from bidders, which she said benefitted "less solvent companies." As a result, bid winners include "companies that have been previously bankrupt, have been on the brink of bankruptcy or have poor or absent credit ratings with major manufacturers," she said.
"Yet, these firms are to honor a three year contract period at unsustainably low levels of payment. How exactly is that to occur without diminishing product quality or the level of service to the patient?"
Despite Congress' full plate of issues — including averting a government shutdown — the briefing drew a crowd.
"It was standing room only and at least 25 staffers were turned away," said Johnson.
Those who made it into the packed room also heard from speaker Cynthia Morton, executive vice president of the National Association for the Support of Long Term Care.
"If I had to summarize our perspective in one sentence, it would be that the current competitive bidding program simply is not properly designed, is fundamentally flawed and the ramifications for patients will be serious and long-lasting," said NASL's Morton.
The bidding process allowed bidders to submit low bids "ostensibly to gain access to the market," she explained, but they were not bound by their bids and could later drop out. The resulting rates "were unduly influenced by what I would describe as drive-by bidders who did no more than drive the rates down and then left the scene," Morton said.
"It appears that some of the aspects of the competitive bidding program are based more on math than on good policy. The focus on cost savings has driven the program beyond rational limits and rational processes — this needs to be fixed," she concluded.
Laurence Wilson, director of CMS' Chronic Care Policy Group, spoke to the group in defense of the bidding program, which rolled out to nine Round 1 cities in January. According to CMS, things are going fine. The agency plans to bid Round 2 in another 91 cities as early as this spring.
Johnson, however, said he was happy with the legislative aides' interest in hearing more about the bid program, even though they "only had about 48 hours' notice" in advance of the meeting.
PAMS' Shirvinsky echoed the sentiment. "Congressmen Thompson and Altmire were extremely supportive toward us and our position in introducing our panel to the assembled staffers, many of whom were representing freshmen members and were hearing about competitive bidding for the first time," he said. "Briefings like this are very much of an inside-the-Beltway thing, but extremely important because the sponsorship by a bipartisan team of congressmen gives us a seal of approval and helps to put the issue on their radar screens.
"I circled back to Congressman Thompson's office later in the day and was informed that they had already received numerous calls for more information and requests to sign onto any legislation that may be introduced," Shirvinsky said.
"All in all, I'd say that made for a pretty good day."
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