Bid, audit bills near prime time

Friday, June 13, 2014

WASHINGTON – Industry stakeholders expect Reps. Pat Tiberi, R-Ohio, and John Larson, D-Conn., to lead a group of lawmakers in introducing a bill this week that would require HME providers to obtain bid bonds as part of the competitive bidding program.

If a provider receives and accepts a contract from CMS, the bid bond would turn into a performance bond. If a provider receives a contract offer but does not accept it and its bid is at or below the bid price, the government can collect on the bond, explains Cara Bachenheimer, senior vice president of government relations for Invacare. 

“That’s the beauty of it,” she said. “We believe the bill will be at least budget neutral because of this possibility of collecting on the bonds.”

The bill would also require providers to prove that they meet licensure requirements before they submit bids. A similar provision was included in the Senate Finance Committee’s version of the “doc fix” bill earlier this year.

Because the process for obtaining a bid bond would be similar to a surety bond, it shouldn’t be much of a burden for providers. An added bonus: In addition to CMS, the surety bond company would perform a financial assessment, stakeholders say.

“It’s a two-fold checks and balance,” said Jay Witter, senior vice president of public policy at AAHomecare.

The bill signals a shift in strategy for the industry. While a bill that would replace the competitive bidding program with a market-pricing program (MPP) already includes a provision requiring binding binds, it also includes a number of other provisions, which may be weighing it down, stakeholders say.

“Out of the gargantuan MPP bill, everyone understands binding bids,” Bachenheimer said. “This is non-controversial.” 

The industry’s goal is to get the bill passed, on its own or as part of a larger bill, before the next round of bidding is set to take place in 2015, stakeholders say.

“This is something that Tiberi has talked about with the chairs of the relevant committees,” Witter said. “He’s run all the traps on this.”

Stakeholders are also making ground on another bill, this one to reform the audit program. It was announced at AAHomecare’s Washington Legislative Conference in May that Rep. Renee Ellmers, R-N.C., planned to introduce such a bill. Since then, she has been fine-tuning language to make sure that, like with the bid bill, it has legs, stakeholders say.

“Every time you do something like this, you want to fix all the problems, but her goal is not to fix all 100 problems,” said Beth Bowen, executive director of the North Carolina Association for Medical Equipment Services, which will host Ellmers at its summer meeting on June 27. “She wants a bill with teeth but that will pass.”

The industry continues to build its case against both the audit and competitive bidding programs. Just last week at the Heartland Conference, The VGM Group released a study that shows Medicare saves money by investing in HME. For every $1 that Medicare spends on mobility equipment, for example, it saves $16.78 in treatment for avoided falls, according to the study, conducted by Brian Leitten of Leitten Consulting.

“You always hear the drum beat from CMS about all the savings,” said John Gallagher, vice president of government relations for VGM. “We need to be able to say, ‘No, you’re losing money. You’re gutting the very entity that’s saving you money.'”