Competitive bidding: Congress 'didn't get answers from CMS' at hearing

Thursday, September 16, 2010

WASHINGTON - Members of Congress put CMS, not the HME industry, through the wringer during last week's hearing on competitive bidding, stakeholders say.

Most of the questions that members of Congress asked during the hearing were directed at Laurence Wilson of CMS, Daniel Levinson of the Office of Inspector General (OIG) and Kathleen King of the Government Accountability Office (GAO).

"Every member of Congress who was sitting in the room asked (Wilson) a question," said Cara Bachenheimer, senior vice president of government relations for Invacare, who attended the hearing. "They all took their (allotted) five minutes; some took more."

The Health Subcommittee of the House Energy and Commerce Committee held the hearing to discuss the impact of competitive bidding on quality, cost and access.

The questions that members of Congress asked Wilson and company included: How has CMS improved the competitive bidding process; will the program reduce the number of HME providers, especially in rural areas; will the program increase instead of decrease costs; how did CMS protect itself from "suicide bids"; does the agency have a process in place for reporting problems with the program?

Members of Congress came away largely empty-handed, stakeholders say.

"They didn't get answers from CMS and they're starting to see this as a train wreck," said John Gallagher, vice president of government relations for The VGM Group.

Only two members of Congress openly supported competitive bidding during the hearing: Reps. Henry Waxman, D-Calif., chairman of the Energy and Commerce Committee; and Anna Eshoo, D-Calif.

"I think that early indicators are positive that competitive bidding is working," Eshoo said. "I understand that suppliers don't like it, but this is a new day. We have the responsibility to extend the lifetime of the Trust Fund."

Members of Congress asked only a few questions of Karen Lerner of Allcare Medical, the HME industry's representative at the hearing. When asked whether competitive bidding would reduce the number of suppliers and decrease competition, Lerner said, "(The program) is inherently anti-competitive bidding. Ninety percent of suppliers won't be able to compete in the marketplace."

When asked whether competitive bidding was a good way to deal with "excessive cost" in Medicare, Lerner pointed out that the program would increase not decrease costs because it would lead to additional hospital stays and delayed discharges.

"The fact that (Lerner) didn't get as many questions--that's a good thing for us," Bachenheimer said. "The focus was on CMS."

Stakeholders like the industry's position going into a second hearing on competitive bidding (this one held by the Ways and Means Committee, probably later this month) and a lame duck session after the November elections.

"The hearing helps setup members of Congress to say, 'This is something that we have to fix,'" Gallagher said.

Rep. Frank Pallone closed last week's hearing by saying: "This was extremely helpful to know some of the problems...we have to dig a little deeper as well."

To view a recording of the hearing or read testimonies, go to