Some winning providers lobby against NCB delay

Sunday, June 22, 2008

HOLLYWOOD, Fla. - A group of providers who won contracts in Round 1 of national competitive bidding traveled to Washington last week to lobby against an industry-backed effort to delay the program.

"We've all invested a lot of time and money in being prepared to go live July 1," said Jeffrey Holman, a winning Florida provider and founding member of the Contracted Medical Equipment Suppliers Association of America. "When you talk to members, you find out that trucks have been purchased, inventory sometimes put into place, warehouses have been filled. Expansions of phone and computer systems have been done. Now we are somehow being cast as the bad guys because we did everything right and won."

As of Friday, 50 to 60 of the 350 winning providers in Round 1 had joined the new association, said Holman, president of First Priority Medical Services in Hollywood, Fla.

Between Thursday and Friday last week, he added, members of the group visited about 20 congressional offices to lobby against the delay.

"As we speak, I'm standing outside Sen. Obama's office, waiting hopefully to speak with his legislative aid on health care," he told HME News at about 3 p.m. Friday. "We're trying to make some noise."

The competitive bidding program has flaws, he acknowledged, but they can be easily fixed and should not lead to delaying the program.

House and Senate bills to delay competitive bidding, S. 3144 and H.R. 6252, would terminate Round 1 contracts, which are scheduled to take effect July 1, and re-bid them in 18 to 24 months. They would also delay Round 2 until at least 2011. To pay for delay, the industry agreed to a 9.5% payment cut nationwide for all product categories included in Round 1 of the program. (As part of competitive bidding, CMS plans to slash prices for the products, on average, by 26%.)

Michael Reinemer, AAHomecare's vice president of communications and policy, said no one discounts the "heroic efforts" by the winning bidders to comply with the program under very tight deadlines.

"But I think looking at the situation more broadly you have to recognize that this program is a disaster, a train wreck," he said. "It has to be fixed for the sake of future rounds."

Reinemer also mentioned that a number of winning bidders have said they'd prefer a 9.5% cut rather than go ahead with competitive bidding.

Winning bidder Tom Mullaney, who does not belong to the Contracted Medical Equipment Suppliers Association, isn't one of them.

"As a business person, it needs to go through because of the amount of time and money we've spent," said Mullaney, president of Mullaney Medical in the Cincinnati competitive bidding area. "As a provider, I think it is a bad plan. I've been on record from the beginning that service is going to go down. But that is true in any part of health care where you want to save money."

John Gallagher, vice president of government relations for The VGM Group, called the program extremely flawed and said "it has to go away" for the good of the entire industry. Additionally, he said, the House bill to delay competitive bidding includes language that would allow winning providers, in the event that the program is delayed, to recoup from the government money spent gearing up to service the bid.

"Good luck trying to get that," Mullaney said.