Bid News Blog

This news site presents breaking news on the CMS competitive bidding programs. It is interactive and readers are encouraged to post stories in their names or anonymously
September 27, 2011

There is no going back

From: HME News

Even our champions in the House have made it clear for months that they support repealing the program, but that doesn’t mean they support returning to the status quo’

By Liz Beaulieu, Editor

WASHINGTON – HME industry stakeholders, led by AAHomecare, are taking more formal steps toward an alternative competitive bidding system.
In August, AAHomecare’s board of directors approved a market-based pricing system for HME that it hopes can replace competitive bidding, and earlier this month, the association blasted the news to members in an email bulletin. The system is largely based on the work of Prof. Peter Cramton, a vocal critic of the program, with several modifications and additions.
“There are people who are not going to love this proposal,” said Tyler Wilson, president and CEO of AAHomecare. “But you need to look at it in reality, instead of in isolation. If we do nothing, we’re faced with the current program rocketing ahead into Round 2. It’s not an option of doing nothing and going back. The option is not doing this and having the program go forward.”
The system includes Cramton’s clearing price structure (a provider who submits a market price at or below the “clearing price” would be required to accept a contract), bid bonds and performance guarantees, and several other of the professor’s recommendations.
But the system also modifies and adds to Cramton’s ideas by, for example, reducing the size of the affected areas (market pricing by county or aggregates of counties in more rural areas, rather than metropolitan statistical areas) and reducing the number of affected product categories (a limit of two per county).
“The idea is not to cover Cleveland from top to bottom for every product,” Wilson said. ” So if you don’t win a bid for beds and CPAP, you’re going to be excluded from those product categories, but hopefully your menu of products is large enough that you can get beyond that.”
Stakeholders believe the system is the best bet at protecting the industry.
“Even our champions in the House have made it clear for months that they support repealing the program, but that doesn’t mean they support returning to the status quo,” said Seth Johnson, vice president of government affairs for Pride Mobility Products. “They support repealing it and replacing it with some alternative that results in savings but not the negative outcomes we’re seeing in Round 1 and that would be multiplied tenfold with the expansion of Round 2.”
A wide range of parties, including state associations and other industry groups like NAIMES and The VGM Group, were involved in developing and vetting the system.
“No one wants to say we’re bowing to competitive bidding, because we’re not,” said Rose Schafhauser, executive director of the Midwest Association of Medical Equipment Services, and a member of AAHomecare’s State Leaders Council. “Our No. 1 goal is to show how bad this program is, but we have to be realistic that they’re going to want something from us to eliminate the program.”
Stakeholders are now working double time on the Hill to move the system from a set of principles to legislative specifics, and into a piece of legislation, all before the end of the year.
September 21, 2011

Election season offers opportunity: ‘There really is a pox on both houses. The electorate is angry.’

From: HME News

By Theresa Flaherty, Managing Editor

WASHINGTON – While lobbying lawmakers is nothing new for HME stakeholders, the 2012 election cycle promises to be different.
That’s because a lagging economic recovery and a high unemployment rate have many Americans saying enough is enough, stakeholders say.
“In no other time has the electorate been this mad at their own congressman,” said John Gallagher, vice president of government relations for The VGM Group. “Whether they are Republicans or Democrats, there is really a pox on both houses. The electorate is angry.”
What that means: Lawmakers may forgo the traditional “town hall” style meetings of the past, in favor of smaller, friendlier settings, stakeholders say.
As a result, HME providers should focus on hosting meet-and-greet events at their companies, Gallagher said.
“It’s a selective audience with particular topics, rather than a town hall where the opposition shows up and screams and yells,” he said.
It’s also important to approach lawmakers already in office and those seeking office, Gallagher said.
“Make sure we are not talking to just the existing Congress, but the next guy in,” he said.
Indeed, with anti-incumbent sentiment high, stakeholders predict there will be a lot of turmoil over the next few election cycles.
“There are going to be many new faces in Washington,” said Walt Gorski, vice president of government affairs for AAHomecare. “I think one-third to a half will not be here in four to six years. That’s always challenging, but it creates opportunity to talk to people about the value of home care and what we do.”
September 13, 2011

OIG warns that arrangements between CPAP suppliers and sleep labs pose F&A risks

From: Lexology

Ober Kaler
Alan J. Arville

In Advisory Opinion 11-08, the OIG took an unfavorable view of both an existing and a proposed arrangement where the requestor, a durable medical equipment (DME) supplier of continuous positive airway pressure equipment and supplies (CPAP), would contract with sleep labs enrolled with Medicare as independent diagnostic testing facilities (IDTFs) to provide CPAP set-up and patient education services on behalf of the DME Supplier. In its July 14, 2011, ruling, the OIG expressed concern that payments to potential referral sources for such services could potentially generate prohibited remuneration under the federal antikickback statute.    

September 8, 2011

Round 2: Bigger than expected?

From: HME News

‘I think a lot of people are going to be caught off-guard’
BALTIMORE – HME providers who don’t think they’re part of Round 2 may want to think again.
CMS on Aug. 19 released the affected zip codes for the 91 metropolitan statistical areas (MSAs) and it didn’t take long for industry stakeholders to notice that the areas were bigger than expected. For example, they noticed the San Antonio MSA includes zip codes for Comal County, which includes New Braunfels, and part of Karnes County; and the San Francisco MSA includes zip codes for Marin County.
“They’ve added zip codes around the MSAs to bring in higher population areas,” said Wayne Stanfield, president and CEO of NAIMES. “These are areas that wouldn’t normally be included in the MSAs.”
For Round 1, CMS released additional information about the nine MSAs in this order: maps of the affected counties, then zip codes.
Stakeholders believe CMS will release the maps at some point, but in the meantime, the agency is making it more difficult for providers to determine whether or not they’re in an affected MSA.
“They’re doing it in reverse this time,” said Rob Brant, past president of AMEPA. “They’re giving providers the zip codes, which forces them to scratch their heads and say, ‘Where are these zip codes? What counties in the San Antonio MSA are included?’ I think a lot of people are going to be caught off-guard.”
To give providers a hand, AMEPA is putting together its own maps using the zip codes CMS has released, Brant said.
“Some of these areas have 300 or 400 zip codes in them,” he said. “It’s going to be very difficult to figure it out, especially for those companies that service people in outlier areas. They think, ‘Oh, well, we’re far enough from the center of the MSA; it won’t affect us.'”
AMEPA will also use the maps to educate legislators who mistakenly believe Round 2 won’t affect their constituents, Brant said.
“A legislator representing New Braunfels might say, ‘We’re not in the San Antonio MSA,’ but they are,” he said.
Nothing surprises industry stakeholders about competitive bidding anymore.
“From what we’re hearing, there is some program creep here,” said Walt Gorski, vice president of government affairs for AAHomecare.