Competitive bidding: Committee tackles Round 2

BALTIMORE - The two hottest topics at this week's Program Advisory and Oversight Committee (PAOC) were how to subdivide the New York, Chicago and Los Angeles competitive bidding areas (CBAs) and how to rollout Round 2 of the program. For both, CMS's current plans need some work, say members of the committee.

As part of Round 2, CMS plans to subdivide the New York, Chicago and Los Angeles CBAs by county. For the New York CBA, for example, that means subdividing it into five areas: Nassau/Brooklyn/Queens; Suffolk; Bronx/Manhattan; North-West NY Metro; and Southern NY Metro.

Committee members have two major concerns with this plan. First, they wonder whether CMS should use something other than county lines to subdivide the CBAs.

"People tend to not cross eight-lane highways or drive around mountains--would those be better boundaries?" asked Tom Millam, a consultant and former COO of AmMed Direct, a diabetes provider. "Driving around a mountain could be a multi-hour trip. That puts stress on the program and the beneficiary. It makes it untenable."

Second, if CMS does subdivide the CBAs by county lines, committee members want the agency to use scattergrams and other diagrams to take a closer look at how that may affect access to products and services.

"We want to make sure the subdivisions don't arbitrarily exclude a particular type of provider from a needy area, especially when it comes to life-saving devices like oxygen," said Dr. Doran Edwards, a consultant and former CMS medical director.

Committee members also have concerns with CMS's plan to release its proposed rule for Round 2 this summer, right about the same time it announces the winning bid amounts for Round 1.

"The way Round 1 overlaps with Round 2, before the public has a chance to see if there are any consequences and to comment, doesn't make a lot of sense," Millam said. "That doesn't serve the agency or beneficiaries well. Not providers, either."

After releasing its proposed rule for Round 2 this summer, CMS plans to release a final rule and list of product categories this fall; announce the bidding schedule in winter 2011; begin accepting bids in spring 2011; announce winning bid amounts in spring 2012; announce winning bidders in summer 2012; and implement the program in January 2013.

Committee members say they have mixed feelings about another topic discussed at the meeting: an update on Round 1. Although they were pleased to hear that the registration and bid submission process went more smoothly this time around, they weren't happy CMS couldn't offer any details on its plan to announce winning bid amounts in June.

"We asked several pointed questions about that and CMS's response was that it's very early in that process and there's an awful lot of analysis and number crunching that has to take place between now and then, and they're not ready at this point to give us feedback on how it's going," Edwards said. "They did say that there was an increased volume of applicants this time compared to last time and these applicants appeared to be better educated and better able to manipulate the Web site."

Committee members also got a taste for how CMS plans to educate beneficiaries. Some of the topics discussed: Getting information to beneficiaries sooner rather than later, packaging information differently than other Medicare literature, and broadcasting public service announcements (PSAs) on radio and TV.

"What the dialogue at the meeting opened up is an ongoing discussion of what needs to be done differently," said Barbara Rogers, president and CEO of the National Emphysema/COPD Association.