Industry Testifies to House on MPP, NCB
AAHomecare's Marx to Ways and Means: ' We do not oppose properly designed bidding.'
- By David Kopf
- May 10, 2012
Various industry representatives cataloged competitive bidding's flaws and explained the proposed market pricing program's benefits to the House Ways and Means Health Subcommittee in a hearing on CMS’ bid program and the MPP.
“We do not oppose a properly designed competitive bidding program for home medical equipment," testified AAHomecare Board Chairman Joel Marx. "In fact, we favor and strongly endorse a state-of-the-art auction system that would: achieve true market-based pricing, save exactly the same amount of Medicare and beneficiary dollars that the current bidding system is projected to save, and correct the fundamental flaws in the current system.”
Marx, who is chairman of Medical Service Company in Cleveland, was the lead witness in a panel composed of HME providers and a beneficiary organization, added that the impact of Round One will be much smaller in comparison to the nationwide rollout of Round Two.
"Providers, in the first year of a three-year fixed pricing contract, have been able to offset excessive and arbitrary price reductions in the bid areas with revenue from non-bid areas," he said. "This will prove to be impossible in Round Two when an additional 91 markets are involved in 2013 and beyond that when CMS applies bidding pricing in non-bid areas, including rural markets like Montana, Iowa, Kansas and even upstate rural New York, where I operate in towns that are as small as those in the Midwest."
Full testimony of each hearing participant can be downloaded at:
Also testifying before the committee were Laurence Wilson from CMS and Kathleen King from the Government Accountability Office on the first panel. On the second panel was Marx, H. Wayne Sale, representing NAIMES, Dino Martis of Ablecare Medical in Cincinnati, and Alfred J. Chiplin, Jr., speaking for the Center for Medicare Advocacy.
A number of the members of the Subcommittee directed questions at Laurence Wilson s about Round One of the bidding program. At one point, Rep. Tom Price, M.D. (R-Ga.), asked Wilson about the dramatic reduction in oxygen and CPAP providers caused by the bidding program, while remarking about the program that, “We don’t believe it’s actually competitive.”
"Since the commencement of the pseudo competitive bidding in these nine CBAs, 90 percent of the suppliers have been removed from the Medicare marketplace, leaving fewer suppliers to service the growing population of Medicare beneficiaries," testified Wayne Sale, Chairman of the National Associational of Independent Medical Equipment Suppliers. "… Suppliers who were not chosen to participate in the contracting process have experienced obvious decreases in referrals and revenues, and subsequently had to lay off workers; an estimated 40 percent have gone out of business."
To help quantify that point, AAHomecare has called on providers that know of any companies that they believe may have closed because of competitive bidding to email the names and locations of those businesses to iJay Witter at firstname.lastname@example.org by May 18.
Asked about the MPP proposed as an alternative, Laurence Wilson said, “We believe it will result in universal failure,” but did not support the opinion with any facts or arguments.
At the end of the hearing, Chairman Wally Herger (R-Calif.) said “I want to commend the supplier industry for offering an alternative that is based on competition and aims to set prices using market forces … It is my hope that the Congressional Budget Office will soon inform us as to the spending implications of moving to such a proposal.”
David Kopf is the Editor of HME Business.