Competitive bidding: Industry tiptoes forward

Sunday, July 20, 2008

WASHINGTON - With national competitive bidding delayed, the home medical equipment industry now seeks to work with CMS officials to re-shape the beleaguered program.

In addition to delaying competitive bidding for 18 to 24 months, the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) requires CMS to implement certain improvements, including notifying bidders about paperwork discrepancies and giving them time to make corrections. But those improvements only go so far, industry stakeholders say.

"The bill will improve the program, but will it make it a perfect program?" said Cara Bachenheimer, senior vice president of government relations for Invacare. "That's doubtful."

Beginning with Round 2, MIPPA also allows CMS to subdivide competitive bidding areas (CBAs) with more than 8 million people; and exempt rural areas and CBAs with a population of less than 250,000 for at least five years. Additionally, the bill requires CMS to compare bidding and non-bidding prices before adjusting prices in non-bid areas.

If they'll hear them out--and that's a big if at this point--industry stakeholders would like to work with CMS officials to also improve the process for qualifying bidders. In short, they'd like experience to count for something.

"Some of the winning bidders in our area--they weren't headquartered here, they provided maybe two wheelchairs a year, and they operated out of their garage," said Rick Perrotta, president of Network Medical Supply in Charlotte, N.C., one of the 10 CBAs in Round 1 of competitive bidding. "There's nothing in this bill that prevents that type of situation from happening again."

Provider Ron Reed would also like industry stakeholders to work with CMS officials to better regulate bid pricing.

"Some of the bids were ridiculously low," said Reed, owner and CEO of Benchmark Mobility in Indianapolis. "It's like, if you're going to sell me a car for $1,000, I'd love to buy it, but I'm going to think twice about the quality."

It's too early to predict now, but depending on how CMS modifies competitive bidding and who earns seats in the White House and Congress in November, the industry may lobby Congress to kill the program completely. Some legislators have implied that delaying the program means killing it.

"All bets may be off, in terms of whether the program continues or not," said Tim Pederson, CEO of WestMed Rehab in Rapid City, S.D. "That wouldn't be a bad thing."

But killing the program would probably come at an additional cost, industry stakeholders point out.

"If it costs a 9.5% cut to delay the program, what's it going to cost to kill the program?" said Seth Johnson, vice president of government affairs for Pride Mobility Products. "That's our biggest concern."

At the end of the day, industry stakeholders hope its success in delaying competitive bidding will give it more bargaining power with CMS and Congress going forward.

"We've communicated that we can be an effective voice, and Congress and CMS see that," said Don Clayback, vice president of government relations for The MED Group. "We know our issues aren't going to go away, so that's a benefit."