Texas: Medicaid moves toward bidding

Thursday, October 28, 2010

AUSTIN, Texas - For HME providers in Texas, it's one down and two to go in their fight against a proposed rule that would allow the state's Medicaid program to competitively bid incontinence supplies.

The Medical Care Advisory Committee (MCAC) voted in September not to recommend approval of the rule for publication. But that's not stopping two other state agencies: the Health and Human Services Committee (HHSC) and the Texas Comptroller of Public Accounts (TCPA), says Liz Moran, executive director of the Medical Equipment Suppliers Association (MESA).

"(The MCAC) threw a small wrench into their effort, but the TCPA and HHSC are moving forward," she said.

State officials planned to discuss the proposed rule again at a "stakeholder conference" Oct. 11, Moran said.

State officials believe competitively bidding incontinence supplies would do two things: save money, and reduce fraud and abuse. In a letter to the MCAC, they estimate such a program would save $55.3 million over five years, and they note $15 million was paid in 2007 and early 2008 for "alleged services" involving incontinence supplies.

But stakeholders would like to see the state save money some other way.

"The state wants to save money and we understand that, but we don't believe competitive bidding is the way to do it," Moran said. "We're working with them to discuss some other viable alternative."

As for fraud and abuse: Stakeholders believe the state's claims are misleading. How many of the improper payments, for example, were due to billing errors?

Stakeholders worry state officials have come under the influence of out-of-state providers who want to become their single-source providers for incontinence supplies (see related story this page). The attraction: Texas paid $136.9 million for incontinence-related products and supplies in fiscal year 2009, according to the letter to the MCAC.

Eventually, however, state officials will come to their senses, says provider Sandra Hoskin.

"I think it will all fall through," said Hoskin, president of American Medical Equipment in Houston. "The economy is too bad right now to be sending money out of Texas to out-of-state providers. Also, with the elections coming up, I don't think the state wants to be putting mom-and-pops out of business."

Another provider isn't so sure.

"I consider this to be a legitimate threat," he said. "We'll see how committed the state really is to discussing this with providers and listening to them or if it's all just window dressing."