Stakeholders ‘aghast’ at bid proposal

‘We’ve already stripped the benefit and I don’t think there’s any more savings to be had’
Friday, February 16, 2018

WASHINGTON – Industry stakeholders say they are as surprised as anyone by a proposal to expand Medicare’s competitive bidding program to rural areas.

“We don’t know who is proposing this or what evidence there is that this idea is prudent,” said Jay Witter, senior vice president of public policy for AAHomecare. “We are going to demand answers.”

The proposal is included in the budget for the Department of Health and Human Services for fiscal year 2019, which was released Feb. 12. The provision would also eliminate the requirement that CMS pay a single payment amount based on the median bid amount, and, instead, pay contract suppliers at their own bid amounts.

HHS says these changes will result in $6.5 billion in savings over 10 years.

“I am aghast that there’s belief in the budget that there’s $6.5 billion that can be take out of the DME benefit,” said Tom Ryan, president and CEO of AAHomecare. “We’ve already stripped the benefit and I don’t think there’s any more savings to be had.”

HHS says in the event that less than two suppliers submit bids in a rural area, CMS will use a reference price from other, similar rural areas. In many of those areas, there could very well be fewer than two suppliers bidding. At a well-attended Capitol Hill briefing Feb. 14, provider Mike Calcaterra, Northern Zone vice president for Norco and the Montana State Chair for Big Sky AMES, detailed how 20% of HME providers in Montana and 37% of providers in Idaho have closed their doors since 2013.

“There’s a real access issue,” said Ryan. “We have a solution. We need to get the interim final rule moved forward and we need support for H.R. 4229.”

Other DME-related provisions in the HHS budget include:

Eliminating the face-to-face requirement; testing whether using a benefit manager will result in fewer improper payments and lower utilization; and expanding prior authorizations to orthotics and prosthetics.


Good job HHS you are destroying the DME business in our country.  How do you think there is any more money to be saved after you cut rural providers 51%. Whats sad is we thought our new Sec of HHS was going to help us, wrong he is for competitive bidding in rural areas. Where is the IFR and H.R. 4229???

CMS has obviously convinced HHS that grinding the DME industry down to just a few remaining players will streamline the program and save big bucks in the long run. I'd be SHOCKED if the nationals didn't have a hand in the sale of this bill of goods: Think of the administrative cost savings CMS will realize when there are only a handful of providers to keep tabs on. And, it only makes sense that national providers will be able to keep prices low...the efficiencies of scale and buying power should easily keep their costs low, which will translate into HUGE savings to CMS well into the future.

But, of course we're speaking about bureaucrats that won't need to rely on this system now or into the future, and corporate honcho's who realize that this current storm will ultimately subside.

The bigger problem is that when the rain stops and the clouds clear CMS will be standing in a fetid swamp with no lifelines left. Having one major player in the electric mobility market worked out SO well for CMS. I guess five years is just too long to expect bureaucrats to remember how putting nearly all its eggs in one basket isn't really such a great idea. In case anyone in HHS is reading - think THE SCOOTER STORE! I'm sure that by having all its DME eggs in four or five baskets would NEVER produce the same result.

I'm sure that the well-designed competitive bid program will continue to work out quite well when there are just a few providers left to service the entire country. All of the experts describing the various flaws in the program were surely just morons. All of the providers, past and current,  located in rural areas doing their best to provide value to the system simply MUST be greedy whiners staying around to milk that 1% of the CMS budget that is such a gravy train. So, to imagine that, once the field is cleared of all those pesky providers, bid prices will increase dramatically is simply ridiculous. After all, an oligopoly ALWAYS works out to be the lowest-cost, highest value proposition.

Ronald Reagan had it right when he said, "In this present crisis, government is not the solution to our problem; government is the problem." In THIS case, though, the word "government" can be replaced with more specific terms such as HHS, CMS, bureaucracy, and certainly COMPETITIVE BIDDING!

I've seen the documents but they both spend money on lobbiest which is required by law. Not easy to find and frankly without a lawyer you almost can't. 

Just a thought.