Industry pokes holes in bid program

Friday, March 8, 2013

WASHINGTON – A pair of planned Hill briefings and a “Dear Colleague” letter are turning up the heat on the HME industry’s fight against competitive bidding.

The briefings, scheduled for March 14, will give stakeholders another chance to make their case against the competitive bidding program.

“This is an opportunity to educate members of Congress and their staff on the program and the problems identified with Round 2,” said Seth Johnson, vice president of government affairs for Pride Mobility.

Reps. Glenn Thompson, R-Pa., and Bruce Braley, D-Iowa, both outspoken opponents of competitive bidding, called the House briefing. Sen. Rob Portman, R-Ohio, who in February was one of a dozen lawmakers who urged the Congressional Budget Office (CBO) to score the market-pricing program (MPP), and Sen. Joe Manchin, D-W.Va., called the Senate briefing.

Scheduled speakers at the House briefing include Tyler Wilson, president and CEO of AAHomecare; and John Shirvinsky, executive director of the Pennsylvania Association of Medical Suppliers (PAMS).

“A 45% cut is unrealistic, it’s unsustainable and it’s unsupportable,” said Shirvinsky. “(Lawmakers) also need to focus on who the bid winners are and how the system was gamed.”

It has become clear in recent weeks that there are contract winners who bid low so that they could turn around and sell, say stakeholders. Premier Home Care received an inquiry letter from a broker representing a company that accepted contracts and is looking to sell. With one location and about $1.6 million in annual sales, the provider managed to get offered 60 contracts in 40 areas.

“CMS (is supposed to) evaluate the net worth of a company and its expertise and area coverage,” said Wayne Knewasser, vice president of government relations for Louisville, Ky.-based Premier. “It allowed them to go willy-nilly and bid on areas that they aren’t in or even near.”

All of this has pushed industry champion Rep. Tom Price, R-Ga., to ask CMS to consider a delay in Round 2. In a “Dear Colleague” letter addressed to Marilyn Tavenner, CMS Acting Administrator, he expresses concerns with the implementation of the program, including what financial standards were used to qualify providers, and how patient demand in a bid area and provider capacity to meet that demand was determined.

“The problems have been multiplied in Round 2,” Shirvinsky said. “The question is, who is going to provide the service? We don’t know due to the lack of transparency.”