HME Business

The Centers for Medicare and Medicaid Services issued a statement yesterday announcing the delay of the national competitive bidding program. The statement came one day after both the U.S. House of Representatives and Senate overrode President Bush's veto of H. R.6331, which will reform and postpone the competitive bidding program.

On Tuesday, the House voted 383 to 41 to pass H.R. 6331, while the Senate voted 70 to 26 to pass the law, which will delay the national competitive bidding program by 18 to 24 months.

However, the postponement is not in the statutory language, according to Cara Bachenhemier, senior vice president of government relations at Invacare Corp.

 "That’s the amount of time CMS said it would take them to redo the program based on the mandates that Congress put in the legislative language," she says.  "It’s going to require them to go back to the drawing board and rewrite the competitive bidding regulation in its entirety. That’s about a two-year process – they’re probably going to try to speed it up – and redo the bid process based on that. They literally are going back to square one to recraft the program."

 According to CMS, the delay in bidding means that Medicare beneficiaries may now use any Medicare-approved supplier for durable medical equipment. Beneficiaries who changed suppliers at the start of the program can continue to use the new supplier or choose another.

The relationship doesn’t fall apart, Bachenhemier explained.

"If the beneficiary chooses to continue with that supplier, that’s their decision," she says. "The pricing will change; the law is retroactive to June 30. So what that means is bid pricing will not be in effect. Providers will be paid at the prices that were in effect June 30 and are again in effect. Since the law is retroactive, it’s as if those bid prices were never in effect."

CMS sent e-mail communication to winning providers informing the winners that the contracts signed in the competitive bidding program for the nine product categories in those 10 areas are null and void, says Seth Johnson, vice president of government affairs for Pride Mobility Products. Providers, who are now back to operating as they were during June, will be paid at the Medicare fee schedule amounts for any of those items that were to be included in competitive bidding.

 
The fee schedules are going to get adjusted for 2009, says David McCausland, senior vice president of planning and government affairs of The ROHO Group.
"So the fees are going to get cut as of the fiscal year," he says.

CMS plans to notify beneficiaries in the 10 competitive bidding areas about the change through a letter within two weeks. The first round of competitive bidding began in the following areas:  Charlotte-Gastonia-Concord, N.C.-S.C.; Cincinnati-Middletown, Ohio-Ky-Ind; Cleveland-Elyria-Mentor, Ohio;  Dallas-Fort Worth-Arlington, Texas;  Kansas City, Mo-Kan;  Miami-Fort Lauderdale-Miami Beach, Fla.; Orlando-Kissimmee, Fla.; Pittsburgh, Pa.; Riverside-San Bernardino-Ontario, Cali; and  San Juan, PR.  

Those suppliers who won bids in the areas listed above are not obligated to fulfill contractual duties. It's more of an ethical than legal issue, Bachenheimer says.

"You certainly don't want to leave a beneficiary stranded, particularly if you're midstream in the process," she says. "Though in today's world, you can't get very far in 14 days."

 With the exception of oxygen and power wheelchairs, the HME industry will pay for the delay through 9.5 percent price cuts to DME.

Bachenhemier believes that removing complex rehab from the bidding program is a step in the right direction.

"It was the most inappropriate package of services for a bidding program," she says." It (now) will never be in a bid program, unless Congress changes the law. It’s a permanent exclusion that helps the whole category of products and services."

Johnson says he's concerned about the application of the 9.5 percent cut to power wheelchair providers, especially in the light of the significant reductions that took place in November of 2006. "Clearly, providers of complex rehab products and services do not have another 9.5 or really 10 percent to give," Johnson says. "We need to do everything we can to provide for a parallel exemption for that cut to complex rehab. We do believe that was the intention of Congress to do that. They recognize the need to provide an exemption for complex rehab, so there's no reason complex rehab should pay for or have to incur that 9.5 percent reduction in payments January 1 of next year."

Johnson says there is language in the legislation that would exempt seating and positioning and other accessories that are not provided on the power wheelchairs included in competitive bidding  from the cut. So there's going to be the establishment of modifiers to the extent you're using some kind of seating product on a manual wheelchair or using power elevating (legrests) or some other type of related accessory on a non-competitive-bid item, the reimbursement level for those related accessories would be exempt from that 9.5 percent cut. That was an important distinction and clarification in the legislation, Johnson added.

McCausland explained that some items were "sort of" included in the bidding, such as wheelchair seating and accessories. These items were included as accessories when associated with a power wheelchair, but they weren't included when they were with a manual wheelchair.

"But the legislation had nothing to support that," he says. McCausland says it was their full intention that Group 2 support surfaces were going to take that 9.5 percent cut. For wheelchair seating and accessories, 20 to 25 percent of business is associated with power wheelchairs, he says. But the vast majority was associated with manual wheelchairs.

"So we raised the issue loud and long to say this just isn't fair," he says. "And thankfully we got the right people to recognize that."

"Now as the dust starts to settle and we've got a few months," he says, "we've got to make sure that CMS doesn't decide it wants to go off with a totally different interpretation."

 CMS says it plans to implement other provisions of the legislation in the coming months and will announce additional information as it becomes available.