The rest of the story

Patrick Naeger
Executive vice president at Healthcare Equipment & Supply Co.

Editor’s note: This is an email that provider Patrick Naeger sent to the office of Sen. Claire McCaskill, D-Mo, following the congressional hearing to review provider business practices and Medicare audits. McCaskill leads the Subcommittee on Financial & Contracting Oversight, which held the hearing.

After watching the hearing yesterday I am a bit frustrated. Clearly, the one thing missing was the DME provider. While the hearing did not shed a good light on the industry, as a whole, it did bring attention to the bad providers who are illegally soliciting Medicare beneficiaries. In that regard, I can assure you, that the overwhelming majority of providers are on the senator’s side and we want to help fight the fraud and we have solution. All of us want the bad ones gone!

Clearly there was some frustration on the part of the senators. It seemed no one from CMS did a very good job providing quantifiable answers so that any of the senators could wrap their heads around the issues of fraud, improper payments and the alphabet soup of contracted auditors. I know how they feel—this is my world and I understand this frustration because these are the folks we deal with daily! Clearly by their own testimony, they provided profound evidence that the system is broken and I am glad the senators saw this first hand. In fact, after hearing Dr. Peter Budetti's exchange with Sen. Johnson, I expect to see the good doctor on Dancing With The Stars next season. While the answers, or lack thereof, were comical, this was no laughing matter.

Furthermore, the statement Mr. Laurence Wilson made to Sen. Tammy Baldwin's concerns about the effect of competitive bidding on rural providers was blatantly misleading at best. Mr. Wilson stated, "The program doesn’t affect areas other than metropolitan areas and surrounding suburban area at this point, so true rural areas are not affected by competitive bidding" In fact, I have a letter that was sent to Marilyn Tavenner, acting CMS Administrator at the time, from Sen. McCaskill asking that they look at the St. Louis CBA and give consideration to rural counties like Washington and Crawford. Mr. Jonathan Blum, deputy administrator, made a visit to Washington County at the request of Rep. Emerson to see and hear firsthand how rural Washington County really is. Washington County only has one hospital. In fact, this hospital enjoys the designation of a rural hospital because it serves a rural community. Washington County, Mo. has 33 people per square mile. This is not urban or suburban by any definition. In fact nine out of the 15 counties in the St. Louis CBA have less than 100 people per square mile. In St. Louis, there could be more oxygen patients per square mile than people per square mile in Crawford County.

Furthermore to show how bad competitive bidding really is and to Sen. Baldwin's point, the only two locally owned independent full line DME providers in Washington County who have invested in brick-and-mortar operations did not get bids. And one of them is ME! Mr. Wilson may paint this picture that all is OK but he is wrong again. The only thing left after bidding out the 10 most costly product categories are crumbs! While I applaud Sen. McCaskill for going after those who are illegally soliciting seniors, we must be mindful not to throw the baby out with the bath water.

Home care is the cure, in my opinion, for keeping Medicare costs down. Home care is the most affordable, most economically feasible solution. Ten thousand baby boomers are retiring every day and the demand for products and services has never been greater, and will continue that way for the next two decades. Now is not the time to eliminate those who are most capable of providing this affordable care to our seniors. Competitive bidding in its current form will destroy the DME industry. The industry has a plan we just need to be heard.

I think this committee could do great work to ensure seniors have the services they will need available to them. In fact, I would ask this committee to have a hearing on how the competitive bid rates were determined. It seems no one can get an answer from CMS and I believe Sen. McCaskill, through her committee, could get this done. While this should be a very easy endeavor it has become impossible. The bids were made, they were open, they were validated and awarded. All notices are out and the bid amounts were announced, but somehow no one—and I mean not even members of Congress—can see how the bids were determined, yet Mr. Wilson is touting how well this is working and will continue to work. While we are told these numbers come from actual suppliers, CMS will not let the sun shine in, unlike in every other government bid opportunity. The providers who will see their businesses destroyed deserve to see why. Furthermore as I understand it, the competitive bidding law was written to expressly exclude any opportunity for administrative or judicial review—surely that can't settle well with any lawmaker and especially with Sen. McCaskill. Obviously, there is more to come and I plan on bringing it to you next month during my visit to Washington.

In the meantime, my offer is still on the table as it has been for several years now. I would love to show the senator firsthand the day-to-day operations of a three-generation DME company. She or any staff is welcome to come and spend as much time as they like. In addition, for any additional hearings she might have looking into the DME realm, I am more than happy to offer my services and give my perspective based on 25 years of experience. Please share this letter with the senator. I hope to hear from you soon about how the senator feels regarding my point of view. Like the good doctor from Chesterfield, Mo., who inspired this past hearing I hope my concerns and experience shared, here, inspire her, as well.

Patrick Naeger is executive vice president at Healthcare Equipment & Supply Co.


To Patrick Naeger, Executive Vice-President at Healthcare Equipment & Supply Company 

 Patrick, while I also share somewhat in your frustration I am even more frustrated to have found out about this hearing a week after the fact.  What better example of the ineptness of the current Medicare, CMS Contractor Audit procedures, than the "Nichole Medical Case" from Philadelphia, PA!  With all due respect to Senator McCaskill D., Mo., from the "Show Me State".  Who better to show her than me to discuss audits?  Someone that has climbed the various rungs of the ladder laid out by "The Statute".  Competitive Bidding may be on every current Provider's mind but I don't believe it was on the front of Senator McCaskill's.  That is NOT saying The Competitive Bidding Issue isn't important.
I find the audit issue so important to the entire healthcare industry that I am currently attempting to reach out to Senator McCaskill through a third party allowing me the opportunity to present the facts of my case to her and the committee.  I have also reached out to other Washington Bureaucrats and I am scheduled for a meeting next Wednesday.  If the Congressional opportunity presents itself to me; I would hope the Industry that showed little support in my effort to The Supreme Court Appeal would view this endeavor differently!  I can only do so much as an individual without an industry's support to champion a change for the inequities within the current system.

Anyone more interested in what my current plan is can contact me @