Competitive bidding: 'Obnoxious' CMS provokes 'extraordinary anger'

Sunday, April 27, 2008

WASHINGTON - It looks like CMS plans to barrel ahead with competitive bidding, ignoring the claims of providers who say they were unjustly disqualified from the program.

"We can negotiate until hell freezes over," said industry attorney Jeff Baird. "But I've reached the conclusion that CMS is going to push forward with competitive bidding unless it is told not to by Congress or a judge."

Baird's not alone. Most industry insiders feel the same way. One even characterized the attitude of CMS officials at a meeting last week as "obnoxious."

During the Tuesday briefing with congressional staffers, CMS revealed that of the 1,005 HME companies that bid in the first 10 competitive bidding areas, 630 or 63% were disqualified mainly for not submitting the necessary financial documentation. CMS compared the process to turning down college applicants who forgot to include their SAT scores in their applications, according to AAHomecare.

"With two-thirds being denied, it seems, by the law of large numbers, that something is amiss here," said Mark Higley, The VGM Group's vice president of development. "A lot of these companies had the financials submitted by accounting firms, and the likelihood of these accounting firms submitting an error is so low that I don't trust that 63% number."

CMS appears to trust that number.

The agency has begun mailing out letters to providers who requested that their disqualified bids be reexamined. While CMS has, upon review, approved some of the disqualified bids, according to Baird, the vast majority of providers received letters that state: "As requested, we have reexamined your bid(s), and have confirmed that 3 years statements of cash flow, credit report and score, 3 years Schedule C or L, and 2 years income statements are missing. Therefore, we continue to be unable to accept these bid(s)."

At the Tuesday meeting, several of the 100 to 150 congressional staffers in attendance reportedly walked out in disgust, frustrated at CMS's lack of detailed explanations about the denied bids and other questions about competitive bidding, such as whether the small number of winning providers will be able to handle a much larger volume of beneficiaries.

"The level of anger at CMS's lack of responsiveness was extraordinary," said Cara Bachenheimer, Invacare's senior vice president of government relations.

It's an uphill battle, but that anger could lead to legislative relief in the form of a delay, maybe not for Round 1, which begins July 1, but possibly for Round 2, Bachenheimer said.

Seth Johnson, Pride Mobility's vice president of government affairs, agreed.

"Clearly, before CMS moves any closer to implementation, they need to, at a minimum, get back to these providers who requested a redetermination and give a detailed response as to why they were disqualified," Johnson said.