Industry: Bid amounts 'will call into question sustainability of program'

Thursday, June 10, 2010

WASHINGTON - The HME industry has long known that CMS plans to announce the winning bid amounts for Round 1.2 of competitive bidding sometime this month, but now it has a proposed date.

The agency plans to announce the winning bid amounts for the nine product categories in nine metropolitan statistical areas (MSAs) on June 25, AAHomecare reported last week.

The industry is preparing itself for every outcome. If the bids come out even lower than Round 1 in 2008, it won't necessarily be a bad thing, industry stakeholders say.

"I don't think people thought the pricing from the first round was realistic, so if these prices are lower, it would really show the fatal flows of competitive bidding," said Walt Gorski, AAHomecare's vice president of government affairs. "It would call into question the sustainability of the program."

In Round 1, providers submitted bids that were, on average, 26% below Medicare's fee schedule at the time.

If the bids come out higher than Round 1, CMS's savings--and therefore the industry's payfor to repeal the program--would be smaller, stakeholders say.

The industry won't get what's it's really looking for, however, until CMS announces the winning bidders in September, stakeholders say.

"I think that will be more telling, because we'll know who the winners are--whether they're small or large providers, local or not local--and how many of them there are in each area," said Seth Johnson, vice president of government affairs for Pride Mobility Products. "In Round 1, that's when we were really able to ID the flaws in the program."

In the meantime, the bid amounts should motivate the industry to re-double its efforts to repeal competitive bidding by collecting more co-sponsors for H.R. 3790 (there were 247 of them on Friday) and finding a senator to introduce a companion bill, stakeholders say.

"This program is on a fast track to be implemented Jan. 1," Johnson said. "We have well over a simple majority in the House that supports the repeal, but we still need to quantify that support in the Senate. That's where the industry needs to focus its attention."