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Statement of Jim Tozzi [1]
Before
The CMS Program and Oversight Committee ( PAOC )
March 17, 2010
Stop the Competitive Bidding Program Until the Financial Standards Are Released
We filed the petition in November and I appreciate the enormity of the decision to release the financial standards. However since the statute states that no bids can be awarded unless the bidders meet the financial standards “specified” by the Secretary, it is imperative that the Competitive Bidding program be delayed until the Secretary releases the aforementioned financial standards.
We have worked with CMS on a number of issues and I can understand the need for a timely venting of the issue—I have been there myself. However lack of a response is no excuse for proceeding with a program which violates the law.
For the complete testimony see the attachment below.
[1] Former Assistant Director White House Office of Management and Budget
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The Paperwork Reduction Act prohibits any federal agency from collecting information from ten or more persons unless the said collection is first approved by the Office of Management and Budget.
CMS has the statutory requirement to assess the effectiveness of its competitive bidding program for durable medical equipment .and report its findings to the Congress. To this end, CMS submitted an Information Collection Request to OMB for Clearance.
Comments on the ICR are of particular significance because deficiencies identified by CMS in the Congressionally mandated study could be the basis for administrative and statutory changes in the competitive bidding program.
CRE has as much, if not more, daily contact with the beneficiaries of the CMS competitive bidding program then does any organization. The aforementioned contact is a result of CRE’s Interactive Public Docket (IPD) for durable medical equipment located here .
The IPD records all phone calls made by beneficiaries (patients). The text of the phone calls are typed and posted on the IPD along with a verbal recording of the phone call.
Beneficiaries often discuss their specific problems with CRE personnel.
Based upon this continuing dialogue with beneficiaries, the comments filed on the ICR are attributed to both CRE and Medicare Beneficiaries.
CRE reached the following fundamental conclusion based upon comments received from Medicare Beneficiaries:
The beneficiary Hotline calls were essential for identifying a critical failure in the ICR:
beneficiaries are not being asked about whether they were forced to change suppliers because of competitive bidding and, if so, was their physical or mental heath impacted by the change.
In its comments CRE states:
The purpose of these comments is to make sure that the government hears the voices of Medicare beneficiaries and corrects this ICR so that CMS can learn and report to Congress on the actual impact of the DME competitive bidding program on older Americans.
It is essential that the interests of Medicare beneficiaries be reinforced by suppliers, the Congress and the public by writing letters to CMS is support of CRE comments. Comments can be submitted to CMS and a copy sent to CRE CMScomments@thecre.com
Read CRE comments below.
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CRE has provided CMS with a mechanism for making the Competitive Bidding Workable, simply by adopting the Small Business Enhancement Option.
Recognizing the statutory requirement that CMS proceed with a competitive bidding program, CRE has developed the Small Business Enhancement Option.
This option has three components:
l. A “single payment amount” which would be determined by the competitive bidding process.
2. Any qualified small business, as defined by SBA, would be able to supply product and services at the “single payment” amount.
3. CMS would require that competitive bidding contracts be non-transferrable for a period of no less than one calendar year.
Failure of CMS to adopt the Small Business Enhancement option requires that CRE pursue an alternative which would ensure that small businesses do not face discrinatory actions in the competitive bidding process; the petition in the attachment hereto accomplishes that goal.
Beneficiaries with complaints should file formal complaints with the Competitive Bidding Ombudsman. See the attached handbook attached below, directions are on page 4, the complaint form is on page 6.cms-complaint-handbook
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The CRE Discussion Forum has benefited from the written views of a number patients and DME providers In that it is easier for a number of DME program recipients to present their views through an audio Hotline, CRE has established a Hotline which can be accessed at 1-800-613-7678 .
Listen to the views of an elderly patient whose access to oxygen may be in jeopardy. Visit the Discussion Forum at http://www.thecre.com/Forum/
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Based upon a series of allegations made by DME suppliers and consultants in the CRE Discussion Forum, CRE is launching an investigation of the CMS Accrediation program. The allegations are set forth at http://www.thecre.com/Forum/?p=1420
The investigation will be conducted by experienced IG investigators and will be performed in a transparent manner, meaning CRE’s analyses and requests for information will be presented on the Discussion Forum at http://www.thecre.com/Forum/
CRE requests that its audience provide relevant background information to CRE through the Discussion Forum. http://www.thecre.com/Forum/
Annoymous submissions are accepted.
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CRE has had extensive discussions with CMS regarding accreditation. CMS has decided not to grant an extension to DME providers. In arriving at this decision, CMS has given serious consideration to several Congressional mandates, including patient access and Congressionally mandated deadlines.
CRE is not in a position to provide its readers with business advice; however we are in a position to inform you of your options regarding accreditation.
If you are likely not to be accredited you should give consideration to voluntarily terminating your enrollment in the Medicare program–please see page 4 of the CMS 855S. If you fail to voluntarily terminate your enrollment with the Medicare program you will lose your billing privileges which will bar you from re-enrolling for at least one year from the date of revocation.
The CMS 855S can be downloaded at http://www.cms.hhs.gov/cmsforms/downloads/cms855s.pdf
A related question is whether pharmacies must also be accredited. CRE is examining this matter, but given our understanding of the importance accorded to meeting Congressional deadlines, we assume they are not exempt from the accreditation requirement; however we are awaiting an official statement from CMS.
CRE continues to be concerned about patient access to medical equipment. In the event suppliers are precluded from providing equipment as a result of the accreditation requirement or if patients no longer have access to medical equipment, please post your experiences on the CRE Discussion Forum. If access becomes a major issue, CRE will use your experiences as a basis for serving CMS with a “Petition for Reconsideration”. The CRE Discussion Forum is at http://www.thecre.com/Forum/
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CRE has requested an extension of the DMEPOS supplier accreditation deadline because of the backlog at accrediting organizations. Failure to grant the extension will result in a serious curtailment of services to beneficiaries, particularly in rural areas. The CRE request lays out in painstaking detail the legal authority of CMS to grant the extension.
Please post your views on the Discussion Forum at http://www.thecre.com/Forum/
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A study released by the American Association for Homecare demonstrates that the CMS Competitive Bidding program decreases competition.
Conclusions drawn from the study include:
During its initial implementaton in 2008, the vast majority of providers were shut out of the program. Of the more than 4,000 providers in the initial bidding areas, only 376 were deemed to have met the bidding program requirements, which were not clearly defined. This “competitive” bidding program, in fact, depresses competition and limits patient access and choice.
During the bidding implementation, nearly 40 percent of companies awarded durable medical equipment contracts for Pittsburgh patients were located outside of Pennsylvania.
The misguided bidding program would allow the government to selectively contract with only a small group of homecare providers, based on lowest-cost, forcing out providers who use high-quality equipment or provide critical patient services. The bidding program ignores the provider’s ability to serve a geographic market, meaning fewer home visits to patients in rural areas. By ignoring the role of service, bidding will result in fewer resources for setting up and adjusting wheelchairs, walkers, and hospital beds.
Competitive bidding concentrates market power, which creates regional oligopolies and reduces quality of patient care.
Primary among economic concerns: by eliminating nine out of ten suppliers in the market for durable medical equipment (DME), the industry would become more concentrated. The initial bid results from 2008 confirmed the fears economists have in placing market power in the hands of very few firms, including reduced service and quality of, and access to, patient care.
CRE will work to have CMS respond to study.
Relevant study documents are attached below.
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CRE has compared the rules covering competitive bidding in the Medicare Advantage program with the competitive bidding rules governing the medical equipment program.
CRE concludes in correspondence to the Deputy Director of OMB that the competitive bidding proposal in the Medicare Advantage program is similar to that recommended by CRE in that it would be used to set prices but would not be used to determine which companies are eligible to compete within the program.
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CMS can not initiate the competitive bidding program until OMB approves its information collection request ( ICR) pursuant to the Paperwork Reduction Act. CRE has identified a number of deficiencies which demonstrate that the CMS ICR is not PRA compliant.
CRE also recommends a solution to the problem: allow all qualified small suppliers to provide equipment at the single payment amount if the suppliers meet the SBA definiton of a small business.
CRE comments are appended hereto.
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