Reports offer little substance for HME industry

Friday, April 11, 2014

WASHINGTON – A recent report from the Government Accountability Office (GAO) on the Round 1 rebid of competitive bidding “parroted” CMS, say industry stakeholders.

“I think the intent of Congress was that this is an independent agency that would look at competitive bidding and come up with its own conclusions,” said Tom Ryan, president and CEO of AAHomecare. “If you rely on CMS to give you the answers you are going to get the same results. It’s parroting the conclusions of CMS.”

The report, released April 8, reviewed the program’s impact on beneficiaries, and on both contract and non-contract suppliers during the second year of the program. The report found that the number of beneficiaries decreased by about 22% in CBAs vs. 16% in non-bid areas.

“CMS is saying the decline is because there was overutilization,” said John Gallagher, vice president of government relations for The VGM Group. “That’s absolutely wrong. If there’s a 22% decline, beneficiaries are suffering.”

If there’s any reason for such a large decline, say stakeholders, it’s a lack of available providers in those areas. The report also found that the top four contract suppliers generally accounted for a large proportion of market share; and that the number of suppliers with allowed charges of $2,500 or more decreased, on average, 27% in CBAs vs. 5% in non-bid areas.

“The program is minimizing the ability of small providers to do business,” said Cara Bachenheimer, senior vice president of government relations for Invacare.

Another report issued April 8, by the Office of Inspector General (OIG), found that CMS generally complied with bidding rules in the Round 1 rebid. The OIG recommended that the agency follow its established program procedures and applicable federal requirements consistently in evaluating the financial documents of all suppliers; and ensure that all bids are included in the calculation of single payment amounts.

Those conclusions are in line with what the industry has been saying, particularly with regard to financial transparency, said Ryan. 

While neither report provided the shot in the arm that stakeholders would have liked, they say they will push back on CMS’s claims that declines in utilization haven’t harmed beneficiaries.

“Does CMS really understand what’s happening with the decrease?” said Ryan. “We are hearing from case managers, discharge planners and social workers. We know there’s a problem.”

View the full GAO report.

View the full OIG report.