Competitive bidding repeal comes with 'hefty' price tag

Thursday, August 12, 2010

WASHINGTON - The cost to repeal competitive bidding is a blood-pressure rising $20 billion over 10 years, according to the Congressional Budget Office (CBO).

That's more than double the CBO's initial score for H.R. 3790 ($9.6 billion) and $3 billion more than CMS's own projected savings for the program ($17 billion over 10 years).

"It's a pretty hefty price tag," said Cara Bachenheimer, senior vice president of government relations for Invacare. "I'm not sure that the CBO is 100% accurate."

Industry stakeholders had to have the bill re-scored to take into account the healthcare reform bill passed earlier this year, which included some HME-related cuts, and the bid amounts released in July, which will reduce reimbursement by, on average, 32%.

Shocked industry stakeholders hope to enlist allies in Congress to find out exactly how the CBO came up with $20 billion and to work with the office to get the score reduced.

"When you have discrepancies this large, one has to wonder what assumptions were made to drive the price through the ceiling," said Walt Gorski, vice president of government affairs for AAHomecare. "What's in the meat grinder, so to speak?"

Even if allies in Congress get the CBO to reduce the score, providers must start asking themselves some tough questions, stakeholders say.

"If we're stuck with ($20 billion) or we get something less, the question is what does that mean in terms of a pay-for and is the industry willing to do that," Bachenheimer said.

There are some who believe the industry has already paid too much. In 2008, the industry absorbed a 9.5% reimbursement cut to pay for a delay in competitive bidding for 18 to 24 months.

"I'm getting e-mails from some angry providers," said Wayne Stanfield, president of and CEO of NAIMES. "I've always said, 'The more we offer to pay, the more Congress and CMS are going to say we're overpaid.' We have to draw the line somewhere and it needs to be pretty low."

What the industry is willing to sacrifice to repeal competitive bidding is something the industry will want to have figured out before Congress holds two hearings on the program, probably in September, when CMS plans to announce the winning bidders.

"We'll have to be prepared to answer that question, yes," Gorski said.