Round 1 Briefing Is ‘More Lipstick on a Pig’

From: Home Care Magazine

WASHINGTON — CMS took an airbrushed picture of Round 1 competitive bidding to Capitol Hill last week, but the distorted image could end up working in the HME sector’s favor, some stakeholders believe.

At a congressional staff briefing on the five-month-old program May 10, CMS representatives said it was moving along more smoothly than anticipated with “virtually no complaints.” Repeating numbers relayed at a Program Advisory and Oversight Committee meeting in early April, agency officials said of 54,000 “inquiries” to the Medicare hotline, only 43 were complaints about bidding.

It was a case of “more lipstick on a pig,” according to the American Association for Homecare.

“Senate staff pressed CMS to describe the difference between a complaint and an inquiry but the agency was unable to give a suitable answer,” the association reported in its May 11 newsletter.

“CMS is misrepresenting and misinforming Congress,” added John Gallagher, vice president of government relations for Waterloo, Iowa-based VGM Group. “The more they do that, the more I think it [works] for our side.”

According to VGM sources, CMS told congressional staffers that clinical outcome concerns never materialized, that 97 percent of suppliers had experience in their localities and 76 percent of suppliers had experience in the specific DME service in the locality.

Such assertions defy reality, Gallagher said.

Industry providers have also disputed those figures since Round 1 contract suppliers were announced in November 2010.

“In the Pittsburgh CBA, we have a substantial number of contractors from other states — Ohio, California, Tennessee, Florida, etc.,” Georgie Blackburn, vice president of government relations for bid winner Blackburn’s Pharmacy in Tarentum, Pa., told HomeCare in an interview following the announcement. “It’s incredible that so many contractors are from outside our state and/or have never supplied the product for which they won an award.”

Various organizations have also reported cases of Medicare patients in bidding areas being unable to find a provider to supply or fix equipment. Gallagher noted specifically the story of a Florida woman who battled for a month to find someone to service her oxygen concentrator.

Gallagher said he did not believe most in Congress are buying CMS’ rosy picture of competitive bidding. While legislators who support the bid program will likely accept it, others are skeptical, he said.

According to VGM, officials at the Capitol Hill briefing also said that CMS:


  • Will survey beneficiaries in the Round 1 CBAs this summer to ascertain changes in the level of service and quality of equipment.
  • Is evaluating ways to improve bona fide bid rules and analyzing mean bid vs. pivotal bid methodology. The latter would mean fewer suppliers and higher costs, the agency warned.
  • Is also evaluating “a more realistic estimate” of overall supplier capacity, which would further limit supplier participation.
  • Did not know how many contract winners have gone out of business and is not tracking that data.


Last week, VGM, AAHomecare and other industry associations urged providers to press their legislators for support of H.R. 1041 to repeal competitive bidding and to create a companion bill in the Senate. As of Friday, 97 cosponsors had signed on to the measure in the House.

“While concerns about the program continue to grow in the Senate, more work is needed,” AAHomecare told members in a May 13 update. “It is imperative that you contact both of your U.S. senators to describe the problems with the Medicare bidding program for home medical equipment and services. Let your senators know the devastating effect that ‘suicide bidding’ will have on you and your patients.”

He thinks “there is a very good chance” for a Senate bill, Gallagher said, noting that Friday’s report from the Medicare trustees underscores the need for a particularly well-run agency to handle Medicare. According to the report, the Medicare Part A trust fund will run out of money in 2024, five years earlier than anticipated. (See “Medicare Trust Fund Kaput in 2024.”)

“CMS is woefully inefficient,” Gallagher said. “That needs to be addressed. The more that builds, the more they lose credibility, the more we have a chance …

“I think we just continue to highlight the absurdity of CMS’ claims,” he said. “You talk with members of Congress, they all want to dismantle CMS and start over. It’s nonfunctioning. Blow it up and start over.”

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