CMS moves forward with competitive bidding

Sunday, March 6, 2005

March 7, 2005

BALTIMORE - Industry leaders breathed a sigh of relief last week when CMS got serious about developing quality standards designed to prevent fly-by-night HMEs from participating in the 2007 competitive bidding program.
“If we don’t have standards, the bottom will fall out,” said Cara Bachenheimer, Invacare’s vice president of government relations. “You will have people who are not committed to the business come in and low ball, and that will drive the prices artificially low.”
Bachenheimer is one of 21 members of the Program Advisory Oversight Committee, which met with CMS officials Feb. 28 and March 1-2. Unlike previous meetings, PAOC members this time felt CMS officials had taken their previous concerns and comments to heart and had begun to develop a game plan to implement the mandated competitive bidding program.
“Previous meetings were very frustrating because it seemed like CMS realized that they had a huge amount of work to do but didn’t know where to start,” said one industry watcher.
At the most recent meeting, CMS and PAOC members addressed quality standards, how to structure the bidding process and how to ensure that small providers - not just large HMEs with economies scale - are able to participate in the program.
At the moment, CMS has lots of questions and few answers.
Regarding small provider participation, CMS has to decide how to define a small company and whether they can: 1. bid as part of a network; 2. Subcontact our some of the bid work.
On conducting the program, CMS must decide how to solicit bids; how to determine a winner; and whether a provider must bid on all products or be able to pick and choose.
For standards, CMS plans to address such items as compliance with local, state and federal laws, policies and procedures for providing products and services; human resources; ethics, information management; and financial management.
“It looks like they are on track,” comment NCART Executive Director Sharon Hildebrandt on the standards. “It looks like they are hitting all the right spots in terms of what should be addressed.”
As far as implementing the bidding program, CMS has an aggressive time line. The agency wants to have a draft bidding plan developed by July 2005. That draft will address the provider application process and criteria for selecting products to be included in the bid. It also will address criteria for deciding where to roll out the program.
CMS will reconvene PAOC members this fall and solicit comments on the draft. Look for a final draft in early 2006, probably by March. During the balance of 2006, CMS will educate payers, providers and referral sources about competitive bidding; choose what products to include in the program; and decide where to roll it out. (CMS will debut the program in 10 of the largest metropolitan statistical areas.)
“I think this was the most substantive of the meeting,” said PAOC member Asela Cuervo. “At this point, we need to see what direction CMS plans to go in and we’ll know more detail on that when the rule gets published.”