Not so fast, Stark says

Saturday, May 31, 2008

WASHINGTON--Rep. Pete Stark, D-Calif., pledged at a May 6 hearing to work with the home medical equipment industry to repeal national competitive bidding, a program he described as “somewhere between flawed and lousy.” But Stark, who chairs the Ways and Means Committee’s health subcommittee, made it clear to industry representatives that it would come at a cost.

“Is your industry prepared to have their fees adjusted downward to the extent of $6 billion over five years if we get rid of this bidding process?” Stark asked AAHomecare’s Tom Ryan, who testified at the hearing. “That’s the bind we’re in (under pay-as-you-go).”

Ryan, an AAHomecare board member and president and CEO of Homecare Concepts in Farmingdale, N.Y., said the industry was “ready to talk about alternatives.”

Unsatisfied, Stark asked the question again. Ryan answered, “Yes.” Stark responded, “Then I think we can do business.”

Stark scheduled the hearing after he and his colleagues heard numerous concerns from providers and beneficiaries about unfairly disqualified bidders and reduced beneficiary access. Prior to the hearing, Stark told several publications, including The Wall Street Journal, that he wanted to “scrap” the program.

Sources say Ryan’s response keeps alive the industry’s hopes of repealing or delaying competitive bidding.

“If he had said no, Stark would have said, ‘Then why the heck are we here?’” said Cara Bachenheimer, vice president of government relations for Invacare. “We would have lost all opportunity to make any meaningful change.”

Sources emphasized that Ryan’s response doesn’t necessarily mean the industry has made a commitment to reducing reimbursement by $6 billion over five years. The devil’s in the details.

“We needed to keep the dialogue open, and by saying yes, Tom was saying, ‘I’m willing to talk with you, Mr. Stark,’” said Walt Gorski, AAHomecare’s vice president of government affairs. “Now it’s a matter of sitting down with members of Congress, getting figures and making an informed decision. We have to get a lot of clarity.”

There’s a growing sense that providers are willing to make sacrifices--mainly “a reimbursement cut in the doable range not the crazy 26% range,” one source said--to repeal competitive bidding.

“A cut would allow CMS to achieve its goal of saving money and it would allow us to achieve our goal of maintaining a competitive marketplace,” said Georgie Blackburn, an AAHomecare board member and vice president of government relations and legislative affairs for Blackburn’s in Tarentum, Pa. “I also think it would better promote quality of care, especially if CMS still requires accreditation.”

The seven weeks between the hearing and July 1, when CMS expects to launch Round 1 of competitive bidding, needs to be a whirlwind of lobbying, sources said. Industry stakeholders and legislative allies like Stark need to convince senators to attach language to a Medicare package they plan on introducing in early June.

“Stark has been honest that this is the Senate’s ball to hit first,” said John Gallagher, vice president of government relations for The VGM Group. “So it behooves providers to contact their senators. There are some legs on moving this forward.”