American Association for Homecare outgoing chairman Robert Steedley testified yesterday before a House Ways and Means Subcommittee on Health hearing titled, “Improving Competition in Medicare: Removing Moratoria and Expanding Access.”

The subcommittee’s Chairman Rep. Kevin Brady (R-Texas) formally invited Steedley, who wrapped up his term chairing the association the day of his May 19 testimony.

Steedley, who is the president of provider Barnes Healthcare Services, focused his testimony on two key subjects: how the flaws of the current competitive bidding program are diminishing beneficiary access to home medical equipment and supplies, and how replacing that program with the Marketing Pricing Program, developed by various bidding and game theory experts, could protect that beneficiary.

“Contrary to the official program report, patients are receiving less service and lower quality care because of CMS’ competitive bidding program,” he said. “At Barnes, and many other companies, beneficiaries call-in consistently to report problems with the companies that won the bids. Conversely, we hear from many companies that were awarded bids that simply could not keep up with the demand created by the holes left in the market by competitive bidding.”

Steedley cataloged seven key problems with the program that were creating a situation of diminished access to HME:

1. Providers’ bids were not binding commitments. (While binding bids legislation was passed as part of April’s landmark doc fix legislation, it still has yet to be put into place.)
2. The pricing calculation is flawed.
3. Composite bids, the averages of a provider’s bids across multiple products, are distorted.
4. The program lacks of transparency.
5. The program is essentially designed to be “gamed” by participants.
6. CMS Monitoring of equipment quality is weak and non-transparent.
7. There is no due process or appeals process in place for providers to appeal CMS’s methodology for establishing payment rates, making contract awards, designating bidding areas, deciding on the phased‐in implementation approach, selecting items and services or the bidding structure and number of contractors. 

Steedley, who noted that he and AAHomecare both support “healthy and fair competition,” and noted that the MPP could fix the problems that ail the bidding program.

“This alternative preserves the concept of competition and ensures future beneficiary access,” he said.

The MPP is a proposal supported by Ways and Means committee member and longtime HME champion Rep. Price (R-Ga), who advanced past legislation in the 113th Congress that would have replaced competitive bidding with the MPP. The legislation, which involved the input of various economic experts in bidding models and game theory, garnered 180 co-sponsors in the House.

A trial of the MPP model, which was organized by Univeristy of Maryland Economic Professor Peter Crampton,  demonstrated the “night and day” difference in terms of methodology and speed between how it works versus competitive bidding.

“The MPP is an electronic auction system, which takes place over a few days,” Steedley noted. “During the auction, suppliers know where their bids stand and they can make adjustments to stay competitive.  At the end of the auction, suppliers know if they have won or lost contracts.  This is vastly different than the current competitive system, in which suppliers are notified a year later after the bid window closes about the results of the auction.”