OIG will ‘peel back onion’ on CMS, stakeholders say

Friday, August 30, 2013

WASHINGTON – If an investigation by the Office of Inspector General (OIG) goes the HME industry’s way—and stakeholders believe it will—CMS will no longer be able to blow off concerns about competitive bidding.

The OIG on Aug. 22 notified Reps. Glenn Thompson, R-Pa., and Bruce Braley, D-Iowa, that it will conduct a “limited scope review” in Tennessee, Maryland, Michigan and Ohio to address concerns that, as part of Round 2 of the program, CMS awarded contracts to providers that didn’t meet accreditation and state licensure requirements.

“The OIG is very influential,” said Cara Bachenheimer, senior vice president of government relations for Invacare. “We’re determined to be biased and CMS is determined to be biased, so they’re the objective arbiters.”

Thompson and Braley requested the investigation in a June 20 letter to the OIG. The letter followed CMS’s decision to disqualify 30 contract suppliers for Tennessee because they didn’t meet requirements.

Stakeholders have long argued that CMS has played fast and loose with the requirements. Per the agency’s own rules, providers had to meet requirements in the areas where they submitted bids by March 30, 2012, a deadline that was extended to May 1, 2012. But in Tennessee, for example, CMS gave contract suppliers until July 1, 2013, the day Round 2 went into effect, to meet a requirement that they have a physical location in the state that is enrolled with Medicare and licensed.

“What happened in Ohio is, the providers who were unlicensed got licensed in June of this year, so they weren’t licensed until 15 months after the fact,” Bachenheimer said. “CMS has been using a highly irregular process.”

The OIG also plans to determine the impact of how CMS applied state licensure requirements on the single payment amounts.

“If these were non-bona fide bids and they were included—it really starts to peel back the layers of the onion on CMS,” said John Gallagher, vice president of government affairs for The VGM Group.

Stakeholders expect the OIG to complete its investigation by the end of this year. Also forthcoming: 1.) Another report from the OIG, this one required by law, reviewing whether CMS selected contract suppliers and determined single payment amounts in accordance with federal requirements; and 2.) a report from the Government Accountability Office (GAO) reviewing the impact of Round 1 on, among other things, quality of and access to equipment and services. 

“This all helps to keep the noise level high,” said Seth Johnson, vice president of government affairs for Pride Mobility Products.

Stakeholders believe the OIG and GAO will come to the same conclusions that they have.

“We’ve outlined a number of problems and we’re receiving a number of reports of complaints, so we’re confident that the OIG and GAO will find significant issues,” said Jay Witter, vice president of government affairs for AAHomecare. “This will send a strong signal to CMS.”



Does it seem logical that we allow the government to choose who will compete in these contracts? They are removing the ability for thousands of DME/HME companies to compete in the "free" market system. I won't dispute the idea of a bid system, but why are they disallowing companies that have spent thousands of dollars to meet compliance regulations from competing while allowing others (often not having experience in the product line or a physical location in the region) to "serve" patients? Why not use the bid system to determine a fair value for reimbursement and allow any business that meets CMS accreditation standards the opportunity to give patients in that region the best service possible?