HomeCare Magazine

ATLANTA — The Centers for Medicare and Medicaid Services flung open the bid window for the Round 1 rebid of the DMEPOS competitive bidding program on Wednesday, but the unsettling health care reform environment was causing some providers to hold back on submitting bids.

Last week, both Blackburn and Rob Brant, general manager of City Medical Services in North Miami Beach, Fla., spent time on the Hill talking to legislators about the perils of bidding for DMEPOS.

“It looks like the Florida legislators will sign on,” Brant said on Wednesday, adding that he was encouraged by the reception to the Meek bill. “I feel at the end of the day like they are going to repeal [competitive bidding],” he said. “But I am putting my bid in.”

Brant said he expected the same problems with the rebid as there were in the original Round 1.

“I don’t expect anything different. It’s déjà vu all over again,” he said. “Medicare is basically doing the same thing, saying the same thing, using the same methodology as before. There is no judicial review, no transparency.”

Brant believes this time around there will be far fewer companies bidding, with many done in by the first Round 1, or by the mandates for accreditation and a surety bond, or by the 9.5 percent DME reimbursement cut and the 36-month oxygen cap.

“There are so many companies that are leaving the program. Some were accredited and said, ‘I can’t stay in business anymore with all this and still provide quality products and services,’” said Brant, who is also president of the Accredited Medical Equipment Providers of America. “I can see how people can throw in the towel.”

According to CMS, he noted, only 205 DME providers still exist in Miami-Dade County after the mandatory accreditation and surety bonds were implemented this month. AMEPA had predicted that 200 would be left standing, but 205 is still a near 50 percent drop from before, Brant said. Competitive bidding will further reduce the number. (See related story in this issue.)

Blackburn said she believes federal legislators are getting the message, and Meek’s office is being particularly aggressive in getting it out. “I was in Meek’s office and it was very good to see that this office is working so hard to get the 100 signatures we feel we need [on H.R. 3790],” she said.

‘Work like It Won’t be Passed, but Pray like It Will’

Both Marx and Rice said they also are campaigning for support of the Meek bill.

“I think that is probably the most important thing we can do right now,” Marx said. He cautioned, though, against banking on the Meek bill’s passing and taking effect before the bid window closes.

“I don’t expect it to impact the deadline of Dec. 21, but it’s a start. It’s a good Plan B, but don’t make it your Plan A,” he advised, adding that providers need to “work like it won’t be passed, but pray like it will.”

Rice said he is trying to get California legislators on board with the bill. “I have my congressman’s administrative aide on speed dial,” he said. “I don’t think as a stand-alone bill it is going to go anyplace, but I do have some hopes that it can be attached to something else.”

John Shirvinsky, executive director of the Pennsylvania Association of Medical Suppliers, said there are opportunities for the Meek bill to ride on another, larger bill.

“You have health care reform that is working its way through, and the doctor’s bill that has cropped up,” he said, referring to a Senate bill that would halt Medicare reimbursement cuts to physicians. The so-called “doc fix” bill, however, failed to clear an initial Senate hurdle last week, likely ensuring doctors will have to wait until health care reform legislation is finished before Congress returns to the issue.

So opportunities exist, and for all intents and purposes, we have until a year from now,” Shirvinsky said of the Round 1 implementation. “But it would be nice to get rid of it now so people wouldn’t have to go to the expense of putting in a bid.”

However, he continued, “We can’t count on [competitive bidding] being repealed. The Meek bill is a heck of a battle. There’s a lot of heavy lifting. We’ve got to fight harder to get our voice heard. But we can do it.”

Shirvinsky and the providers interviewed for this article stressed that every provider, whether in Round 1 or not, should be campaigning for the Meek bill.

“We are all in Round 1,” both Shirvinsky and Blackburn said.

“The Senate Finance Committee [reform bill] is expanding Round 2 to 100 metropolitan statistical areas and fast-tracking the date for applying competitive bidding results to the rest of the nation,” Shirvinsky said. “Everyone should be concerned about this.”

Marx agreed. “We are all going to be affected by the pricing, whether you win the bid or don’t win the bid. The question is whether you even have a seat at the table,” he said.

“This affects every provider,” Blackburn emphasized. “Our focus now has to be as providers getting our representatives signed on [to the Meek bill] … The bill is a good one, the pay-for is fair and the industry as a whole will stay intact. I hope we can get traction, because competitive bidding is not the answer to health care.”

According to CMS, all bids must be submitted in DBidS, the CBIC’s online bidding system, by 9 p.m. prevailing Eastern Time on Dec. 21. All required hardcopy documents for the bid package must be postmarked by 11:59 p.m. on Dec. 21. Pricing will be released in June 2010, followed by the announcement of bid winners in September. Round 1 implementation is currently scheduled for January 2011.

CMS has also established a Nov. 21 deadline for providers who want to be included in the covered document review process. The agency will notify those who submit their hardcopy financial documents by that date if they are missing any documentation.

During an Open Door Forum Wednesday afternoon, the agency’s Joel Kaiser, deputy director of DMEPOS policy, said the DBidS system was “operating smoothly” and that “as of 11 o’clock this morning, we’ve had a number of bidders that have already completed Form A … so that’s good news.”

Other Round 1 providers, however, said they weren’t rushing in to bid.

“I see no reason to bid early,” said Joel Marx, CEO of Medical Service Co. in Cleveland. “There is nothing to be gained aside from the satisfaction of getting your bid in early and on time. I understand if you get the paperwork in early, they’ll tell you if it is complete. Right now, we are still dissecting numbers and waiting to see what happens.”

With health reform still in play on Capitol Hill and packages in both the House and the Senate containing provisions that would affect home medical equipment providers, it’s tough to put together accurate, reasonable bids, providers said.

“The thing that has me most concerned is that tax on manufacturers,” said Georgie Blackburn, vice president of government affairs for Blackburn’s Pharmacy in Tarentum, Pa., referring to the Senate Finance Committee’s health care reform package proposal to levy a device tax on manufacturers.

With just eight weeks until the bid window closes, providers are in the midst of formulating bids based on the current cost of products, but a tax on manufacturers would likely cause that cost to rise, Blackburn said.

“As a provider bidding in Round 1, that has me concerned. You have to know all your costs before putting a bid out there and hope you can sustain it for three years (the length of a bid contract).

“Manufacturers might incur this huge expense through health care reform, and that skews the bids,” she continued. “This will absolutely impact our cost going forward. I don’t see how the bid window can be open without health reform being [complete].”

Chris Rice of Diamond Respiratory Care in Riverside, Calif., said he also is waiting, though he wants to meet the Nov. 21 deadline for document review. He, too, questioned the impact of the device tax should it be implemented.

“The better [manufacturers'] pricing, the better our bid,” he said. “What is a device tax going to do to those of us bidding down the road?”

Backing the Meek Bill

Even as providers ran numbers and worried about the impact of a medical device tax, they also were campaigning for sponsors for H.R. 3790. Introduced Oct. 13 by Rep. Kendrick Meek, D-Fla., the budget-neutral bill calls for a complete repeal of the Medicare DMEPOS bidding program, which was delayed by Congress after a two-week implementation in July 2008. As of press time, the bill had garnered 38 cosponsors.