Competitive bidding draft unveiled: 'Here we go!'

WASHINGTON - In a 203-page proposal released April 24, CMS outlined its plans for carrying out a national competitive bidding program, but it stopped short of stating what products it will competitively bid and in what 10 cities, surprising few industry sources. "Here we go!" said provider Tom Inman of CMS's proposal, which sets the ball rolling for NCB to kick off some time in 2007. Inman is president of Virginia Home Medical. CMS's proposal was published in the Federal Register May 1. The agency will accept comments for 60 days. Despite its lack of detail, the proposal contained at least one hint. When NCB starts next year, it probably won't be in New York, Los Angeles or Chicago. While CMS plans to competitively bid DME in 10 of the largest metropolitan statistical areas, it proposed excluding the three largest MSAs based on population "because of the logistics associated with the startup of this new and complex program," the agency stated in its proposal. "That was more information than I was expecting," said Cara Bachenheimer, vice president of government relations for Invacare. "Now we can make a more educated guess on what the first 10 MSAs will be." With New York, Los Angeles and Chicago out of the picture, at least for now, the next 10 largest MSAs--when total Medicare allowed charges for DME are also taken into consideration--are Miami; Houston; Dallas; Detroit; San Juan, Puerto Rico; Philadelphia; Atlanta; Tampa; Boston; and Washington, D.C. CMS also proposed making product selections based on potential savings. Since oxygen equipment, wheelchairs and scooters, diabetic supplies, enteral nutrition and hospital beds represent the largest number of Medicare allowed charges, the industry knows they're good candidates. "The question is how many product categories are they going to competitively bid?" Bachenheimer said. "They could do two or three of those product categories or they could be more aggressive and do four or five. They could be completely insane and do even more." Jim Walsh, president of VGM Management and general counsel to The VGM Group, predicts--hopes--that CMS will go with less is more. "They're starting to recognize that if they select too many product categories, a lot of providers are not going to survive," he said. "It's going to look like a train wreck." Overall, CMS's proposal raised more questions than it provided answers, several industry sources said. In addition to what products CMS will competitively bid and in what 10 cities, there's still uncertainty surrounding the yet-to-be-finalized quality standards, which providers must meet to participate in NCB. "There are a lot of parts to this program, and they're all moving parts," said Asela Cuervo, an industry attorney. Walsh pointed out that CMS's competitive bidding and accreditation proposals comprise more than 300 pages of documents. The Program Advisory and Oversight Committee (PAOC), a group charged with advising CMS on how to craft competitive bidding, plans to meet in mid- to late May to discuss the proposal. Both Bachenheimer and Cuervo are members of PAOC.