Moving the HME Industry Forward


Binding Bids and Licensure Passes

April 20, 2015

WASHINGTON, DC – President Obama signed Medicare legislation into law last week that included provisions to make all DMEPOS competitive bids binding, and to require proof of licensure in Medicare contract auctions.

“This is a big win for the industry,” said Tom Ryan (pictured upper left at Medtrade Spring 2015), president and CEO of the American Association for Homecare. “It has taken thousands of man hours, emails, calls, visits and personal efforts from providers across the country to build awareness of our issues on Capitol Hill, develop relationships with key leaders on influential committees, and build the political capital necessary to take this from a policy position all the way to a law. More importantly, this win becomes a key talking point in our defense against the 2016 cuts.”

While this law does not apply to the current round of competitive bidding, Ryan reports that AAHomecare will be “pulling out all stops to get it put into effect by the next round one.”

“There is a lot left on the competitive bidding front,” adds Ryan. “Binding bids will become a key talking point in our defense against the 2016 cuts. As these cuts approach, it is crucial that the entire industry get behind one strategy, with one voice, so that Congress can hear loud and clear that the cuts will devastate the industry. No one at AAHomecare is slowing down for one second.”

The Industry Reacts
“We can’t lose sight of the fact that Congress has now acknowledged the program has significant structural issues and intends to let another round of bidding move forward, with those structural issues in place. It’s time to work with a sense of urgency to hold CMS accountable for the flaws in the program they designed, without sufficient outside expertise. We need to put a more immediate stop to what we all now recognize—from the President on down—is inappropriate and lacks structural integrity. If this win did anything, my hope is it put forward some momentum for the industry to push for more immediate changes. An impact that is 3 years out is not a sufficient enough victory to merit real celebration, but it may be enough of a building block to assist with meaningful change to the round two recompete, as well as the rural price application issue.”
Gary Sheehan, MBA, president and CEO, Cape Medical Supply Inc, Sandwich, Mass

“While the law won’t impact competitive bidding in the round two recompete, it does set the bar for a fairer bid process going forward. That gives providers a fighting chance and also shows them that when we work together as an industry for change, we can make it happen. The key going forward is to continue to build our collective voice in tandem with beneficiaries, non profits and other healthcare providers who are all hurt by Medicare reform mistakes. The Reeve Foundation says it best—‘Together we achieve more.’”
Lisa Wells, president, Get Social Consulting, Tampa, Fla

“Through my advocacy efforts for the DME industry, I learned the hard way how difficult it is to pass legislation for our small, greatly misunderstood and politically underfunded industry. On one hand this is a great triumph. On the other hand, this legislation should not have been necessary. If CMS had done their competitive bidding homework, binding bids would have been in place from the get go. Sadly, it is also too little too late for a huge number of DME companies who have either not survived or will not survive until the next round of bidding in 2018. If Congress thought the lack of binding bids was so egregious, they should have immediately instituted it to the round two recompete. Their not-to-hidden agenda all along was reducing the number of DME companies; their mission has been accomplished.”
— Diana Guth, RRT, owner, Home Respiratory Care, Los Angeles

“We’ve taken the first, but important step, to fix this flawed program. Binding bids should ensure that only serious bidders will participate, with the result being reasonable reimbursement.”
Karyn Estrella, president & CEO, Home Medical Equipment and Services Association of New England, New Bedford, Mass

“The recent passage of our binding bids legislation into law sends a clear message to CMS that that the widely acknowledged problems with competitive bidding are not going to be ignored. The HME Industry put years of work into raising awareness and lifting the veil to show the truth: a faulty and failing program in desperate need of reform. While the Industry is celebrating this milestone victory, we must continue onward and building on the momentum in play in Congress. The war is not over; we can not rest. This legislation is the first of many steps that must be taken for the program to become something sustainable, survivable, and beneficial to beneficiaries and the homecare community who serve them.”
Ashley W. Plauché, director of Communications & PR, Lambert’s Health Care, and executive director of the Association for Tennessee Home Oxygen and Medical Equipment Services, Knoxville, Tenn

“Passing the binding bid legislation marks the beginning of a new relationship between Congress and CMS. The leadership in both parties has expressed extreme dissatisfaction with the design and process of the current bidding program, recognizing for the first time that it is an unworkable, poorly designed and operated pricing system that is about as far from market pricing as one can get. That dissatisfaction is our opportunity to build on what we now have until the Market Pricing Plan is in place, audits are run properly and not to enrich contractors, and CMS recognizes, at least publicly, that the DMEPOS benefit has value and should be supported, not destroyed.”
Michael Hamilton, exec director, Alabama Durable Medical Equipment Association, Birmingham, Ala