Contact Your Members of Congress Now: The Momentum to Delay Competitive Bidding Has Increased

June 19, 2008 - Source: Denise McClinton

The American Association for Homecare announced on Tuesday that the Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Chuck Grassley (R-Iowa) this week introduced legislation that would delay implementation of the durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) competitive acquisition program (CAP). Introduction of this legislation, which mirrors H.R. 6252, comes following reports of problems with implementation the program and concerns that the program would result in decreased access to care for Medicare beneficiaries. H.R. 6252, the Stark-Camp bill, was introduced June 12. Summaries of the bills are listed below.

It is essential that every HME provider contact their members of Congress to request their support of these bills. Namely, ask your representative to co-sponsor H.R. 6252 and have him or her contact Drew Dawson on the Ways and Means Health Subcommittee staff at (202) 225-3943 to add his or her name to the list. When you ask your senators to co-sponsor S. 3144, have them contact Jill Gerber on the Senate Finance Committee at (202) 224-4515 to add their names to the S 3144, the Senate version of HR 6252.

Do it now. Industry leaders believe this will be decided in the next week or two. This is a critical time for the HME industry and we must come together to make our voices heard. It is your business that is on the line.

S. 3144
Baucus-Grassley Bill
“Medicare DMEPOS Competitive Acquisition Reform Act of 2008”
Introduced June 17, 2008.
Sponsors: Rep. Pete Stark (D), Rep. Dave Camp (R), Rep. Charles Rangel (D), Rep. John Boehner (R), Rep. John Dingell (D) and Rep. Frank Pallone (D)
Summary: The bill would also make the bidding process more fair and transparent, require suppliers to meet quality standards, and make other improvements to the program.

Temporary Delay Rounds 1 & 2:
-Terminate contracts awarded under Round 1 and re-bid those areas so that new contracts would take effect in 18-24 months.
-Round 2 contracts cannot take effect before January 2011.
-Payment adjustments for DMEPOS in non-competitive bid areas may not take effect until Round 2 is completed.

Offset:
-In January 2009, eliminate the annual inflationary adjustment for all items covered by Round 1 of the competitive bidding program and reduce payment rates for those items by 9.5 percent nationwide. This policy does not affect diabetic supplies furnished by retail suppliers because they were not covered by the bidding program.
-Items that had been subject to the reduction would receive a 2 percent payment increase in 2014, except in any area where a competitive bidding contract is in effect or CMS has otherwise adjusted payment rates.

Bidding Process Improvements:
-Require CMS to notify bidders about paperwork discrepancies and give suppliers the opportunity to correct within a reasonable time frame.
-Provide CMS the authority to subdivide MSAs with more than 8 million people.
-Exempt rural areas and MSAs with a population of less than 250,000 from competitive bidding for at least five years.
-Require that suppliers who bid on diabetic testing supplies offer brands that cover at least 50% of the market by volume (does not apply to Round 1).
-Before using its authority to adjust prices in non-bid areas, CMS must issue a regulation and consider how prices set through competitive bidding compare to costs for such items in non-bid areas.
-Require HHS’s Office of Inspector General to verify calculations used to determine the pivotal bid amount and winning bid amounts.

Quality Measures:
-Require all suppliers to be accredited by October 1, 2009. Ensure that all suppliers, whether they are billing Medicare directly or are a subcontractor to another supplier, be subject to accreditation.
-Require contracting suppliers to disclose all subcontracting relationships to CMS.
-Exclude physicians and other practitioners from DMEPOS accreditation requirements until CMS develops provider-specific standards. Allow CMS to waive physician accreditation if the agency determines they are subject other mandatory quality requirements.
-Establish a separate ombudsman within CMS to handle supplier and beneficiary issues related to the competitive bidding program.

Other Changes:
-Exclude complex rehabilitation wheelchairs and related accessories when furnished with such wheelchairs from competitive bidding.
-Exclude negative pressure wound therapy from Round 1 and require CMS to evaluate how these items are coded and paid.
-Exclude Puerto Rico from Round 1 re-bidding (did not receive enough valid bids in original Round 1 for CMS to award any contracts).
-Allow physicians and other treating practitioners to supply “off-the-shelf orthotics” to their patients without being awarded competitive bidding contract.
-Allow hospitals in bidding areas to supply the same DMEPOS items that physicians and other practitioners will be able to supply (those that are considered an integral part of professional services) without being awarded contracts for those items.
-Ensure that podiatrists and other similar practitioners can prescribe DMEPOS items by using broader definition of physician in Social Security Act. (This relates to a drafting error in MMA that pointed to the wrong definition of physician in the Social Security Act when requiring face-to-face examination in order to prescribe DMEPOS items.)
-Delay mandated GAO report to coincide with delay to Round 1 and expand scope of report.
-Implementation funding of $120 million.

H.R. 6252: The Stark-Camp Bill
“Medicare DMEPOS Competitive Acquisition Reform Act of 2008”
Introduced on June 12th, 2008.
Sponsors: Rep. Pete Stark (D), Rep. Dave Camp (R), Rep. Charles Rangel (D), Rep. John Boehner (R), Rep. John Dingell (D), and Rep. Frank Pallone (D)
Summary:
Legislation would delay implementation of the Medicare durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) competitive bidding program. It would also make improvements to the bidding process, establish quality measures, and make other improvements. The cost of the delay would be offset by a reduction in current DMEPOS payment rates.

Delay:
-Terminate contracts under Round 1 and restart the contracting process in 2009, delaying
program implementation for 18 months.
-Round 2 contracting process begins in 2011.
-Payment adjustments in non-bid areas may not take effect until Round 2 is completed.

Offset:
-In 2009, eliminate the annual payment update (CPI) and reduce payments by 9.5 percent nationwide for those items subject to competitive bidding in Round 1. All other items would receive the CPI update.
-In 2010 through 2013, all items would receive CPI update.
-In 2014, items that had been subject to the 9.5 percent reduction would receive an additional 2 percent update over the CPI except in areas where competitive bidding contracts are already in place.

Bidding Process Improvements:
-Require CMS to notify bidders of paperwork discrepancies and give opportunity to correct within a reasonable time frame.
-Provide CMS with the authority to subdivide MSAs with 8 million or more in population
-Exempt rural areas and MSAs with a population of 250,000 or less from competitive bidding for at least 5 years.
-Require that suppliers who bid on diabetic testing supplies offer brands that cover at least
50 percent of the market by volume (does not apply to Round 1).
-Before using its authority to adjust prices in non-bid areas, CMS must issue a regulation and consider how prices set through competitive bidding compare to costs for such items in non-bid areas.
-Require HHS OIG to verify calculations used to determine the pivotal bid amount and winning bid amounts.

Quality Measures:
-Require all suppliers to be accredited by October 1, 2009. Ensure that all suppliers, whether billing Medicare directly or subcontracting, are accredited.
-Require contracting suppliers to disclose all subcontracting relationships to CMS.

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