Industry scrambles to craft new bidding bill

Sunday, February 24, 2008

WASHINGTON - The industry suffered a major reality check recently when word leaked out of Congress that the Tanner-Hobson bill, legislation intended to make competitive bidding less onerous to HME providers, "is not going to succeed."

Informal reports out of the Congressional Budget Office (CBO) estimate the cost of the bill to be a prohibitive $10 billion to $12 billion over 10 years, say industry insiders. The issue here is Tanner-Hobson's any-willing provider provision, which would let even losing HMEs participate in competitive bidding (at the new bid price), provided they meet Medicare quality standards and other requirements. The bill, H.R. 1845, would also, however, deprive Medicare of significant savings by preventing it, for the most part, from consolidating business with fewer providers.

Industry supporters on Capitol Hill have told AAHomecare that, as written, Tanner-Hobson "is not going to succeed," said Tyler Wilson, AAHomecare's CEO. The association and other industry leaders are now working with congressional allies to craft an alternative bill that does not include the any-willing provider provision, he said.

Without the any-willing provider provision, one of the industry's worst fears will come true: Providers who lose a competitive bid will be unable to seek business with new Medicare patients. That means many losing providers eventually will go out of business as their existing Medicare business dwindles away through attrition, say industry watchers.

"As much as we desperately need any-willing provider, we have to reset a strategy within the confines of the political realties on Capitol Hill," said Cara Bachenheimer, Invacare's senior vice president of government relations. "There are lots of members of Congress who want to help us, but at the end of the day, they are saying, 'You have to come up with $12 billion. Do you want oxygen cuts? Power wheelchair cuts? An across-the-board cut of X percent?' I'm not sure that is an acceptable alternative to the industry."

HME leaders have already begun to craft a new bill that does not include the any-willing provider provision. The Tanner-Hobson revision now in the works would require CMS to rigorously examine the first round of competitive bidding before moving onto round two.

"Until we get Congress to mandate that CMS does that--that it examine the repercussions of round one: the clinical outcomes, impact on beneficiaries and small business--CMS is likely to go sailing along," Wilson said.

Wilson said he's confident that "our sponsors in the House and Senate will be able to craft a legislative package that is more likely to get through Congress this session."

Bachenheimer called the any-willing provider provision critical, but the industry is also between a rock and a hard place. Congress is working under a pay-as-you-go requirement, which means lawmakers can't introduce new Medicare spending that's not offset somewhere else. That requirement did not exist when Tanner-Hobson was introduced.

"There is a lot of frustration and disappointment," Bachenheimer said. "But the question is: What can we realistically get though Congress? This is the reality check that people have to understand."