PAOC questions quality standards timeline

Sunday, December 12, 2004

December 13, 2004

BALTIMORE - HME industry representatives emerged from the second meeting of the Program Advisory and Oversight Committee here last week, wondering whether CMS would produce its quality standards for HME suppliers in time for the launch of competitive bidding in 2007.
“We - really just about everyone - believes that standards have to be developed before you can go out and get bids,” said Dave Kazynski, president of VGM’s Homelink division and a PAOC member. “But the timeline on this appears to be too short.”
CMS expects to issue its Notice of Proposed Rule Making on competitive bidding by late next summer and a final rule by early summer 2006. As competitive bidding gears up in 10 of the largest MSAs for 2007, some PAOC members fear there won’t be enough time to both meet CMS’s new quality standards and bid for business.
CMS believes there will be enough time to meet the new standards and place a bid. It’s not yet clear when CMS will issue the standards, but when they do, the standards are likely to come out as a Program Memorandum.
Nevertheless, provider representatives are still frustrated by the timeline. Much of the talk in between presentations on the PAOC had to do with the challenging chronology.
“Without knowing what the standards are, it’s very difficult to talk about competitive bidding,” said Asela Cuervo, who’s representing AAHomecare on the board.
Over the two-day meeting, CMS and the Research Triangle Institute, a sub-contractor that’s helping CMS get ready for competitive bidding, delivered a series of presentations on issues crucial to the development of a nationwide bidding program.
RTI detailed competitive bidding programs now underway at the VA, and in the Medicaid programs run by Utah and Minnesota, and determined that existing program do demonstrate the feasibility of competitive bidding for DMEPOS.
The presenters laid out the various criteria for selection of the 10 largest MSAs, as called for by the MMA. For example, RTI and CMS could define “largest” by total population, by the Medicare fee schedule or by the allowed charges for DMEPOS. Each methodology throws up a different top-ten list.
RTI also spent a considerable amount of time discussing whether competitive bidding ought to be conducted for all HCPCS codes, for product categories or for each item. PAOC members were left with the impression that CMS would ultimately decide to conduct competitive bidding on individual HCPCS items.
Under the MMA, Congress gave CMS the authority to choose which items will be put up for bid and to exclude items that are not likely to yield significant savings. Some HME providers question whether there can be significant savings to the program after phase-in of the FEHBP cuts Jan. 1. So does CMS.
“We are very mindful of the fact that there are reductions being implemented in January,” said one CMS official after the meeting. “That will be factored into our analysis of savings potential for these items.”
Although the presentations on current competitive bidding programs generally supported the viability of the effort for DMEPOS, at least one PAOC member complained that the presentations were very superficial. For example, the VA slides did not acknowledge that the VA also incurs significant costs for the delivery of DMEPOS items such as hospital beds.
“More interesting were comments from Medicaid officials who sit on the PAOC,” said PAOC member Cara Bachenheimer, Invacare’s vice president of government relations. “Their constant refrain was, ‘Be extremely careful. Go very slowly. Make sure you have quality standards in pace first.’”