CRE Files a Petition with CMS to Compel the Release of Financial Standards for CMS Competitive Bidding
CRE Files Comments with OMB on the CMS Information Collection Request
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.
Testimony of the Center for Regulatory Effectiveness
CMS Program Advisory Oversight Committee
June 4, 2009
I am Jim Tozzi of the Center for Regulatory Effectiveness. We are a regulatory watchdog organization focused on ensuring federal agency compliance with the “good government” laws that regulate the regulatory process. These laws include the Paperwork Reduction Act, the Regulatory Flexibility Act, and the Data Quality Act, also known as the Information Quality Act. We frequently participate in FACA processes and I serve on a FACA committee sponsored by another agency.
I am here to recommend that this committee request that CMS furnish it with information documenting that it has complied with the requirements of the DQA with respect to DMEPOS competitive bidding. CMS’ own DQA implementing guidelines require development of such documentation.
In brief, the Data Quality Act requires that agencies ensure that the information they disseminate complies with quality standards set by OMB and the agency before it is released. This quality assurance process is known as pre-dissemination review. The Act also gives affected parties the right to “seek and obtain” correction of information that may not meet quality standards.
In discussing their extensive pre-dissemination review process and criteria, CMS explains that the “the quality assurance process begins at the inception of the information development process. Information released by CMS is developed from reliable data sources using accepted methods for data collection and analysis, and is based on thoroughly reviewed analyses and models.”
CMS’s Guidelines further explain that the agency “reviews the quality (including the objectivity, utility, and integrity) of information before it is disseminated and treats information quality as integral to every step of the development of information, including its creation, collection, maintenance and dissemination.”
In addition to the basic level of quality assurance that takes place throughout the pre-dissemination review process, CMS has an even higher set of standards for information which is “influential.” CMS states that “Information is considered influential if it will have a substantial impact on important public
policies or important private sector decisions.” There is no question that the competitive bidding information is influential under the DQA.
The pre-dissemination review standards for influential information are not only higher than for other information, they directly relate to and require the advice of this committee. The guidelines state, influential information “should include a high degree of transparency about data and methods to facilitate its reproducibility by qualified third parties.”
Moreover, and this is the part of Data Quality pre-dissemination review process that calls for this committee’s participation, the guidelines state, “Where estimates and projections may not be easily reproduced by third parties due to the complexity and detail of the methods and data, greater emphasis is placed on periodic review by outside panels of technical experts.” Thus, this committee’s work forms a crucial part of CMS’ pre-dissemination review process for the competitive bidding information.
We have written CMS highlighting their Data Quality responsibilities with respect to five specific competitive bidding issues; Level II HCPCS Codes, Beneficiary Demand, Supplier Capacity, Composite Bids, and Pivotal Bids.
Collectively, these five factors determine the structure of the competitive bidding program.
We recognize the difficulty CMS might have in simultaneously documenting their data quality assurance actions in all five areas.
Consequently, we are asking that CMS to initially furnish information regarding agency compliance with only their pre-dissemination review actions concerning supplier capacity determination.
As CRE stated in its letter to CMS:
“In order to fulfill its Data Quality responsibilities, CMS needs to release for PAOC and public review and comment the agency’s algorithm for calculating the supplier capacity for each product category in each of the bidding areas as well as the pre-dissemination review record demonstrating the algorithm meets Data Quality standards.”
Our recommendation is in keeping with the statutory requirements for this committee. Specifically, the MMA states that one of this that one committee’s goals is to provide advice on the “establishment of requirements for collection of data for the efficient management of the program.”
Therefore, I request that this committee ask CMS for their documentation demonstrating that the agency’s supplier capacity determinations will comply with the DQA.
CMS Competitive Bidding: Adopt the CRE Small Business Enhancement Option
CMS’ Durable Medical Equipment Competitive Bidding Program could eliminate as many as 90% of the providers from the market place, primarily small businesses. The loss of these many small firms would jeopardize patient care since the patient-provider relationship is crucial when using home medical equipment. Safeguards must be put in place so another industry is not dominated by “too big to fail” companies.
CMS has not yet demonstrated compliance with “good government” laws , the laws that “regulate the regulators”; these laws include the Paperwork Reduction Act, its companion, the Data Quality Act, and the Regulatory Flexibility Act.
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.
The CMS adoption of the Small Business Enhancement Option would fulfill CMS’s mandatory obligaton to comply with the statutory requirements for a competitive bidding program while preserving the opportunity for small businesses to compete in the DME marketplace.
Allowing small businesses to compete in the durable medical equipment market would also address the most significant violations of the Paperwork Reduction Act and the Data Quality Act identified by CRE in its comments to OMB on CMS’ competitive bidding Information Collection Request.
Attached hereto are CREs recommendations to OMB on the CMS Information Correction Request developed pursuant to the Paperwork Reduction Act. PRA background at http://www.thecre.com/ombpapers/PaperWorkReductionAct.htm
CRE Files Data Quality Alert With CMS
The Center for Regulatory Effectiveness (CRE) has alerted CMS of its obligation to ensure that all actions taken with respect to the Competitive Bidding rule comply with the Data (Information) Quality Act (DQA).. The discharge of this responsibility requires CMS to continue its commitment to disseminating only that data which complies with the DQA by releasing its Data Quality assurance documents on five key components of the competitive bidding rule–HCPCS Codes, Beneficiary Demand, Supplier Capacity, Composite Bids and Pivotal Bids.The CMS Data Quality Alert is attached hereto and is taken pursuant to the Data (Information) Quality Act.
CMS is in the critical stage of implmenting its rule on Competitive Bidding.Technological advances have made the sixty day notice and comment period authorized in the Adminstrative Procedure Act obsolete–the regulatory process is now a 24/7 endeavor.
Presently there is no systematic and public manner in which stakeholders can provide CMS its views on program implementation.
To fill this void, CRE has developed an Interactive Public Docket (IPD) which can be accessed at http://www.thecre.com/blog
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.