It's time for a touchdown

Monday, November 3, 2014

IT’S LESS THAN a month before the November 2014 mid-term elections and, believe it or not, we have a really good shot of having Congress pass into law one targeted and meaningful improvement to the bid program. The concept is akin to a standard that exists in all bidding programs, all except this Medicare DME bidding program: a requirement that bidders be accountable for their submitted bid prices. A “binding bids” bill was introduced June 19, 2014, in the House of Representatives and has enjoyed a steady stream of growing support. We expect a Senate companion bill shortly. 

Undeniably, there is widespread frustration at the difficulty we have had in getting Congress to make meaningful improvements to the Medicare DME bidding program. Ten years after the original legislation was passed, we have learned tough but valuable lessons as we have tried to educate Congress about the serious problems with the Medicare DME bidding program. We have learned that we must have a very small and targeted fix, and that it must be bipartisan and budget neutral. We all would prefer a wholesale repeal and/or replacement of this program, but the harsh political reality is that it is not feasible in today’s environment. So it’s time to step up our collective efforts and put all we have behind this “binding bids” bill to maximize our chances that Congress passes this into law during its “lame duck” session in November-December, 2014. 

The objective is for the bill, “The Medicare DMEPOS Competitive Bidding Improvement Act,” H.R. 4920, to be effective in time for the next round of bidding in the 100-plus Round 2 bid areas, where bidding is expected to start in the first quarter of 2015. Significantly, before a DME provider could submit a bid, it would have to obtain one bid bond per bid area from a private bonding firm. That bonding firm would make a financial assessment of the DME provider and determine whether there was reasonable risk associated with providing the bond. If the DME provider submits a bid price that is at or below the “winning” bid price, the bidder must sign the contract with the Medicare program. If the bidder did not sign the contract, then the government would collect on that bid bond. If the bidder’s price was above the “winning” bid price, and the bidder decides not to sign the contract, the bid bond is returned with no negative financial repercussions to the bidder. The objective of this bid bond requirement is to make it very difficult for speculative firms to be able to simply submit bids and receive contracts in hundreds of bid areas across the country, as we’ve witnessed to date. 

Why bid bonds? Key Medicare/health policy staff on the Hill, who support this bill, prefer to build on existing Medicare policies. With the current Medicare surety bond requirement, policy makers are comfortable with the addition of another type of bond to provide bidders incentive to honor their bids. Without this bid bond requirement, there is no accountability for bidders to submit responsible bids. If they win contracts, they can merely not sign them, or they can sell them, another widespread practice we witnessed. 

The bill also would elevate to federal law the existing licensure requirements that CMS has required through its own regulations. Many senators and representatives have been very concerned because CMS has selected many contractors in Rounds 1 and 2 of the bid program that did not meet the licensure requirements for the states in which they bid at the time of bid submission. Inclusion of a federal requirement of state licensure sends a clear message to CMS.

Binding bids is a universally accepted standard component to any bid program in the world. Members of Congress understand its importance to encourage responsible bids. To date, through the collective grasstops and grassroots advocacy efforts of the AAHomecare, The VGM Group, The MED Group, state and regional associations and others, many members of Congress understand how important this small but critical fix is—but we need to step up our efforts for the final push between now and December. Don’t delay—contact your representatives and senators with the message to sign on as a co-sponsor and to tell their leadership how important this bill is to include in any year-end “must pass” legislative package. For more details, talking points and documents to help you, visit the websites of Invacare, your buying group (MED, VGM) and your state, regional and national trade associations.

You can help make this happen—but you need to act today!

Cara Bachenheimer is senior vice president of government relations for Invacare.