Crafting competitive bidding: The process appears broken

Monday, February 28, 2005

Dennis Trach

Often, what you do not hear at a meeting is as important as what you do hear. After attending three days of meetings of the Program Advisory and Oversight Committee (PAOC) for competitive bidding in December, I came away with that very thought.

Mandated by the Medicare Modernization Act (MMA), the PAOC consists of representatives from our industry to provide advisory and oversight to the competitive bidding process. The intent of Congress was to get advice from the industry on how to best setup a competitive bidding process, and then to provide oversight as the process progresses.

Based on what I heard - or didn’t hear - at the meeting, something has gone awry. For example, at the meeting CMS presented options and obstacles regarding the implementation of competitive bidding and then asked PAOC members for their thoughts on the issues. Fair enough.

The comments, however, often raised more questions but provided no plan to resolve them, leaving CMS without any advice.

The PAOC co-chair also announced that the PAOC was not expected to achieve consensus on the issues and that there would be no PAOC written report(s) produced or submitted. (Ask yourself: Who benefits from not providing CMS a report with specific recommendations on how to implement competitive bidding? Hint: It’s not the industry.)

An initial Notice of Proposed Rule Making (NPRM) is to be published in the Federal Register by late Summer 2005. According to CMS, it takes six to 10 months to draft and get a NPRM through the administrative processes before publication.

CMS stated it has begun writing the draft NPRM and cannot delay that process because competitive bidding must be implemented in 2007, as mandated by the MMA. My calendar says the NPRM and comment period will have to be completed by late Fall 2005 for the Final Rule announcing the first round of bidding to be published in early Spring of 2006. Bids for 10 of the largest MSAs will be submitted sometime thereafter.

In short, what I did not hear at the meeting was definitive advice from the PAOC on any of the complicated issues raised or that the PAOC will consider each of the questions posed and offer an industry acceptable response to each.

If the PAOC does not produce a report and advice on implementing competitive bidding, do you believe anyone is going to review tapes of the meetings for the comments that will best serve CMS and the industry? Or, do you believe CMS will cherry pick the comments for the ones they can use to support their preconceived methods?

Responses to the first two meetings need to be immediate since the draft NPRM is already being written. The issues of which MSAs to begin with, and how, and what to bid are paramount at this point. We should not wait for the NPRM comment period to get on the record regarding these issues. Consensus may not be possible, but the PAOC should look at these issues and vote. Majority rules. The best responses/advice should then be published in a report and delivered to the Secretary of Health and Human Services. Government committees really do vote and produce reports.

The PAOC has a mandate from Congress to provide advisory and oversight functions to the competitive bidding process. From my perspective, it also has a moral obligation to the industry and Medicare beneficiaries to provide specific written advice to CMS. The individual comments provided to date are not what the industry nor CMS needs. We all need the best, least objectionable advice to be provided to CMS. If there is no published report, the industry will have no record of its recommendations. In that case, if competitive bidding becomes a disaster we will have no right to say, “We told you so” because we will have no proof of having told them anything.

Unfortunately, there is no money for an administrative staff or for any support to help the PAOC produce a report of their recommendations. Therefore, industry associations need to step up and provide whatever it takes to help the PAOC produce a written report. Maybe the industry needs to devise acceptable answers to the issues posed by CMS and submit them to the PAOC for consideration, revision, vote, adoption and submission to the secretary. Now is the time for action.

- Dennis E. Trach is regulatory/compliance manager for Associated Healthcare Systems Inc., Amherst N.Y.