CMS Rolls Out Competitive Bidding Proposal; Support for Hobson-Tanner Bill Grows

On Monday, April 24, the Centers for Medicare & Medicaid Services (CMS) unleashed the latest in the proposed competitive bidding rule. Though lengthy, the Durable Medical Equipment Competitive Acquisition Program Notice of Proposed Rulemaking offered little in the way of specifics.

Still unclear are the products and metropolitan statistical areas (MSAs) expected to be included in the first phase of competitive acquisition, set to begin in 2007. CMS did, however, exclude New York City, Los Angeles and Chicago, which represent the largest areas, from the 10 initial MSAs to "gain experience with the competitive bidding process in MSAs larger than San Antonio before moving onto the three largest MSAs," according to the proposed rule. While proposed selection criteria were outlined, CMS did not offer further clues as to which 10 MSAs would make the final cut. The proposal did say that CMS planned to ensure at least one competitive bidding area would be included in each DMERC region and no more than two per state. As for products likely to be bid, CMS said only that they would consider "among the highest cost and volume items or those items that we determine have the largest savings potential."

The proposal also touched on accreditation, reaffirming the new quality standards and an application process that would accredit all suppliers for competitive bidding, but reserving the appointment of specific organizations until after rulemaking. CMS intends to establish the quality standards through program instructions to be published on the CMS Web site sometime this spring. All suppliers must be accredited by an approved accreditation body to be eligible to bill Medicare and participate in competitive bidding.

Under the Medicare Modernization Act of 2003 (MMA), competitive acquisition would replace the current DMEPOS fee schedule payment amounts for selected items in select areas based on a bidding process. Suppliers in a competitive bidding area would submit bids for selected items, and CMS would use these bids to establish Medicare payment amounts. Under the proposed rule, the Medicare payment amounts would be the median of the winning suppliers' bids for selected items. The program, to be implemented in three phases beginning in 2007, is expected to save taxpayers $1 billion annually, cited CMS.

"We intend to implement these DME competitive reforms to get savings for beneficiaries and taxpayers, while maintaining and improving quality," said CMS Administrator Mark B. McClellan, M.D., Ph.D., in a news release. "This is another way in which Medicare is now using competition to bring lower-cost, up-to-date care to our beneficiaries."

AAHomecare announced that it will begin responding to the proposal in the coming weeks and urged continued support of the Hobson-Tanner Bill (H.R. 3559) — a bill intended to modify current requirements for national competitive bidding (NCB) for home medical equipment. Among other Comments for the proposed rule, to be published in today's Federal Register, will be accepted until June 30, with a final rule expected later this year. The next Program Advisory and Oversight Committee (PAOC) meeting is tentatively scheduled for mid to late May. For more information on AAHomecare's efforts and to get a breakdown of the proposed rule, visit

Hobson-Tanner Bill Tops 100 Sponsors

To access the official CMS notice, visit CMS's Web site at the following links:

Hobson-Tanner Bill Tops 100 Sponsors

By Laurie Watanabe, editor of Mobility Management and editorial director of Home Health Products

The so-called Hobson-Tanner Bill — known formally as H.R. 3559 — has secured 101 co-sponsors as of April 28, 2006, according to Pride Mobility Products' Director of Rehab Industry Affairs Wayne Grau.

H.R. 3559 — the Medicare Durable Medical Equipment Access Act of 2005 — seeks to modify current requirements for national competitive bidding (NCB) for home medical equipment. Among other changes, the bill calls for NCB exemptions for smaller communities and the right of participating providers to seek administrative and judicial review. The HME industry is also seeking creation of a companion bill for the Senate, a task made easier, Grau says, by H.R. 3559's surpassing of the 100-sponsor milestone.

"You really need to have 100 members in the House on a bill," Grau explains. "It shows support, especially when it's broad support — bipartisan, both Republicans and Democrats. That's what this bill has. At that point, then we can go to senators. We really want to target a couple on some influential committees, like finance, and say, 'Look, we've got support for this. We'd like to have you guys write a Senate companion bill.' That is really the next goal. We're working with some other people in the industry to get a Senate companion bill introduced probably within the next four weeks."

Meanwhile, work will continue on H.R. 3559, Grau says. "We probably need about (another) 80 to 100 co-signers onto that bill overall to get it passed. But now we have the support in the Senate, so we can kind of multi-task a little bit. We can work on the House bill and the Senate bill at the same time. We have to get two senators to agree to do that, and that's what the 100 (H.R. 3559 sponsors) does: It gives us the support level to get that done."

While some senators are aware of the efforts to change NCB requirements, Grau anticipates that the HME industry will once again have to ramp up its educational efforts. "Do we have to start from scratch? No," Grau says. "I think we can use some of the grass-roots effort that we've already used to educate House members and turn that over to the senators. We can also go to the two senators from Oklahoma, let's say, and tell them, 'Four of your House members have signed on; they think it's a good bill. We'd like you to consider signing the Senate companion bill.' So it's not starting from scratch, but you do start at that number zero (sponsors), and we probably need to get to 30 or 35 in order to get good support in the Senate on this."

The action point for the industry, Grau adds, is "Stay the course. We strongly encourage all dealers to call their congressmen, get involved, join the fight. This bill is good for everybody."

H.R. 3559 was introduced last July by Rep. David Hobson (R-Ohio) and Rep. John Tanner (D-Tenn.).

This article originally appeared in the April 2006 issue of HME Business.


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