Weems Defends Competitive Bidding in Exchange with Kansas Senator
CMS-administrator-designate Kerry Weems proved a staunch defender of competitive bidding in correspondence released last week between Weems and Kansas Republican Senator Pat Roberts. Nominated for the top CMS post but yet to be confirmed by the Senate, Weems was grilled on issues ranging from the validity of competitive-bidding demonstration projects in Texas and Florida to the program's administrative cost. Often, Roberts takes Weems to task for not directly answering his questions and demands another response. For his part, Weems makes clear his belief that competitive bidding will save Medicare billions, protect beneficiaries and be fair to small suppliers.
While nothing new surfaced in the Roberts-Weems letters, Weems demonstrated his ability to marshal references to specific provisions in the competitive-bidding regulations to counter Roberts' objections. While the correspondence is lengthy, here's a quick analysis of the issues and how they played out.
Affect on beneficiaries: Roberts wrote that he was "concerned that the program has no mechanism to review or assess patient impact and quality of care as a result of the program." Weems responded that "CMS is committed to protecting beneficiary access and quality of care." He cited the Texas and Florida demonstration projects that he claimed showed benefits to patients and savings for taxpayers.
Roberts shot back that Weems didn't answer his question about an actual mechanism to formally assess access and care and dismissed the demonstration programs as proving nothing: "The demo only reviewed general survey responses," Roberts wrote. "No baseline was established before the demo began, and no extensive clinical review was done of patient records to compare clinical outcomes at the end of the demo." Weems answered that he will personally monitor the program's affect on patient access. He lists several specific plans, including an ombudsman to investigate complaints, surveys, and the report on beneficiary satisfaction, quality, access and program savings required by the Medicare Modernization Act in July 2009. Weems goes on to list a page of protections and accountability tools written into the competitive-bidding regulations.
Patients in small and rural MSAs: Roberts writes that he is worried about beneficiaries' access outside large metropolitan areas. Weems points out that CMS has the discretion to exempt such areas. Despite a lengthy response, Weems essentially expands on CMS' authority to exempt low-population-density areas but can't cite the kind of formal protections that Roberts is seeking.
Synchronizing bidding and accreditation: Roberts wonders how bidding can proceed while some bidders' accreditation applications remain unapproved. Weems pointedly explains that providers have had since December 2006 to become accredited and that CMS has repeatedly encouraged HMEs to move forward.
Small providers: Roberts tells Weems how important it is that small providers have ample opportunity to continue serving beneficiaries under competitive bidding. He worries, though, that antitrust laws may limit these providers from forming the kinds of networks that may allow them to bid successfully. Weems returns to the final rule and catalogs what he regards as adequate protections for small providers, including ones who want to participate in networks. In addition to provisions such as the 30 percent target for contract award to small suppliers for each product category and not requiring suppliers to submit bids for all product categories, Weems cited CMS' cooperation with the Department of Justice to ensure that small HMEs can form networks without running afoul of antitrust statutes.
Explanations of losing bids: Roberts wants to know if CMS will tell losing HME bid submitters why their proposals were rejected. He is concerned that providers' bids not be thrown out merely because of technicalities. Weems assures the senator that, "CMS does not believe it would advance competition or savings by rejecting bid applications on the basis of incomplete information." That is, even after the deadline, Weems indicated that CMS is prepared to contact bid submitters to clarify issues or gather information that, for whatever reason, wasn't originally provided. On the other hand, Weems said that bidders can't expect detailed analyses of their losing bids, but that "CMS will notify those suppliers that do not win that they have not been selected as a winning supplier and indicate the general reasons . . ."
Administrative costs: Roberts wants to know whether CMS knows how much the administration of competitive bidding will cost. In an initial answer that predictably didn't sit well with the senator, Weems simply wrote about his confidence that the program will achieve significant Medicare savings. In his lengthy follow-up letter, Weems cites the administration's 2008 budget forecast that competitive bidding's administrative costs will run about $45 million. He goes on to argue in considerable detail that the cost will be dwarfed by Medicare savings through reduced "rampant fraud and abuse," and by savings from lower charges to Medicare. He cites Congressional Budget Office and CMS Office of the Actuary forecasts of billions of dollars in savings ? up to $6 billion between 2008 and 2013. Weems cites both organizations' studies that found significant overcharges to Medicare, such as a #1 oxygen concentrator for which CMS paid $2,380 but that was available online for $677 and a #18 respiratory assist device BIPAP for which CMS paid $3,335 but that was available online for $1,348.
This article originally appeared in the July 2007 issue of HME Business.