Binding Bids Bill Imminent

Industry working with 2 House members on bill that would require surety bonds for bidders.

Cara Bachenheimer, senior vice president of Government Relations for Invacare Corp. addressing attendees of a legislative update held at the VGM Group’s Heartland Conference, which was held June 9 through 12 in Waterloo, Iowa.

Various HME industry legislative experts and the American Association for Homecare are working with House and Senate lawmakers to create a “binding bid” bill that could be launched in the lower and upper chamber in coming days.

The biding bid bill builds on existing Medicare surety bond requirements in order to prevent companies from bidding on and winning contracts they intend to unload after winning, without really serving beneficiaries. This would help eliminate low-ball bidding and ensure dedicated providers will be serving beneficiary needs.

The way the bill is drafted, if a company wins a bid in the next bidding of Round One or Round Two, and any subsequent re-bids or re-competes of competitive bidding, that company would be required to obtain a secondary surety bond — essentially a bid bond. So if that company doesn’t sign that contract, it would forfeit the bond and the government would get to collect on the bond, explained Cara Bachenheimer, senior vice president of Government Relations for Invacare Corp. to attendees at a legislative update held at the VGM Group’s Heartland Conference, which was held June 9 through 12 in Waterloo, Iowa.

“The beauty of that is there is revenue in there for the government,” Bachenehimer said. “So it might not just be budget neutral; it might actually save money.”

Also an independent, third party from the private sector would analyze provider financials. So, in the case of brand new companies that won hundreds of contracts with no experience would pay a considerably higher amount for bid bonds in comparison to a company that is an established performer, which would pay less.

The two House Lawmakers working with the industry on the binding bids legislation are Reps. Pat Tiberi (R-Ohio) and John Larson (D-Conn). On the Senate side, the industry is working with Sen. Rob Portman (R-Ohio), and is searching for a second Senator, preferably a Democrat.

“We want to make sure it’s a bi-partisan bill,” Bachenheimer explained.

Both Teaberry and Larsen are senior members of the House Ways and Means Committee, and Bachenheimer says there will probably be several other co-sponsors, as well. The industry has also worked with Health Subcommittee policy staff, as well, to increase the bill’s viability.

The biding bids bill is part of a strategy to chip away at competitive bidding. While H.R. 1717, a bill that would replace competitive bidding with the Market Pricing Program, has been the industry’s primary legislative focus when it comes to stopping competitive bidding, it’s a big ask.

“On Capitol Hill, we’ve been pushing H.R. 1717, but it’s a massive bill; it’s going to probably cost a lot of money and it’s going to be difficult to move,” Bachenheimer says. “We have traction on some smaller issues.”

The industry’s grassroots lobbying has garnered the industry solid support and good will among many lawmakers, but that those lawmakers are asking for legislation that is “more realistic.”


About the Author

David Kopf is the Publisher and Executive Editor of HME Business and DME Pharmacy magazines. Follow him on Twitter at @postacutenews.

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