Competitive bidding: Administrative delay 'focus of attention'

Tuesday, November 23, 2010

WASHINGTON - With the industry's chances of repealing competitive bidding before Jan. 1 looking slim to none, HME stakeholders are pursuing an administrative delay of the program.

"The association has always been trying to stop this program because of its fatal flaws, either through legislation or an administrative delay," said Walt Gorski, vice president of government affairs for AAHomecare. "It has become increasingly more difficult to believe that the program can be stopped legislatively because of cost issues. So the administrative delay clearly has been a focus of attention."

The idea: Get champions in Congress to pressure CMS for an administrative delay, a move that would not require lawmakers to pass a bill or the industry to come up with $20 billion over 10 years to cover the cost of repealing the program.

But it's not exactly smooth sailing from here: While an administrative delay doesn't require a pay-for, it does require the industry to come up with a reason for putting the brakes on competitive bidding, and therein lies the rub, stakeholders say.

"CMS is not going to agree to delay without something on the other side of the coin, and it's what's on the other side of the coin that has polarized some folks," said Wayne Stanfield, executive director of NAIMES.

One option, according to some stakeholders: The industry could make the argument that more time is needed for the economists and auction experts who have criticized competitive bidding to redesign the program. One of those economists, Peter Cramton, is already working on a redesigned program that includes, among other things, binding bids (See HME News, December 2010).

But some stakeholders worry about signing off on competitive bidding and a redesigned program.

"I think the administrative delay is a good idea," said John Shirvinsky, executive director of the Pennsylvania Association of Medical Equipment Suppliers. "I think the concerns of the auction experts are legitimate and tie into a lot of the concerns we've been raising since early 2008. But I think we need to ask more questions of the auction experts."

At the end of the day, the industry should get used to the idea of competitive bidding in some shape or form, warned one industry source.

"Trying to tell Capitol Hill (and CMS) that all 'competitive acquisition' is evil sounds very contradictory to some basic capitalistic, entrepreneurial and American values," he said. "Competitive bidding can and does work well in many situations if, but only if, it is designed and administered correctly."