Senate Passes Binding Bids Legislation

Bundled into the “doc fix” bill, the pivotal competitive bidding reform heads to Pres. Obama to be signed into law.

After more than a decade of legislative debate and frustration that entailed several failed attempts at repeals and reforms, the industry has secured a key win in the fight against competitive bidding: The Senate has passed binding bids reforms that would eliminate “suicide bidding” and unlicensed bidders. Bundled into the sustainable growth rate bill, the legislation is now on its way to Pres. Obama for Executive signature into law.

“Congress has recognized one of the most serious flaws in the competitive bidding program and taken substantive action to eliminate it,” said American Association for Homecare President and CEO Tom Ryan.

Since the beginning of the 114th Congress this year, the industry’s efforts to advance binding bids have been fast-paced. In March, the House of Representatives passed H.R. 284, legislation that eliminates non-binding bids from CMS’s competitive bidding program, and requires surety bids to ensure that bidders live up to their bids, as well as proof of licensure for Medicare contract auctions.

At the same time, H.R. 284 was introduced into the House, Sens. Portman and Sen. Ben Cardin (D-Md.), who are both members of the Senate Finance Committee, launched Senate companion legislation, S.148, into the upper chamber as. Together, the House and Senate bills were known as the Medicare Competitive Bidding Improvement Act (MCBIA).

However, concurrent to those efforts, the provisions from the binding bids legislation were folded into H.R 2 sustainable growth rate package, commonly known as the “doc fix” bill. H.R. 2 (aka, the Medicare Access and CHIP Reauthorization Act of 2015) was first passed by the House and was then passed by the Senate late Tuesday in an overwhelming 92-8 vote. Pres. Obama was expected to sign the bi-partisan package into law.

For physicians, the Senate’s passage of the “doc fix” was critical, as it finally ended a years-long game of Congressional kick-the-can, and nixed CMS from enacting a 21.2 percent cut to doctor’s reimbursement within a day of the implementation date.

For the HME/DME industry, the legislation represents a watershed moment, as it not only vindicates literally years of legislative effort on the part of the American Association for Homecare; the state associations; VGM group; MED Group; economic experts such as University of Maryland Prof. Peter Crampton; a host of provider- and manufacturer-employed legislative players; and the House and Senate lawmakers who went to bat for the industry.

“Thanks to the perseverance of the homecare community, we’ve been able to build strong bipartisan support in the House and Senate,” said AAHomecare President and CEO Tom Ryan. “I would like to thank Representatives Tiberi (R-Ohio) and Larson (D-Conn.) and Senators Portman (R-Ohio) and Cardin (D-Md.) for their leadership on this issue."

“AAHomecare would like to thank Invacare, Mal Mixon and Cara Bachenheimer for their dedication to this issue and for working with key Ohio legislators to make this happen,” Ryan added. “In addition, without the active involvement of many HME providers, state association leaders and others who worked to keep Congress educated about the ill-effects of this program in their localities, this bill would never have become law.”

At its core, the binding bids legislation contains three pivotal requirements:

  • Providers must have proof of state-level licensure before they can submit bids.
  • Bidders would be required to obtain a “bidding bond” that functions like a surety bond.
  • If a bidder declines the contract and its bid was at or below the bid price, then that bidder would forfeit its bond.

Together, these elements address the damaging problems of unqualified bidders and suicide bidders from the competitive bidding process.

While the binding bids reform notches a significant win for the industry, AAHomcare’s Ryan noted that additional reforms to the competitive bidding program must happen.

“Congress has recognized one of the most serious flaws in the competitive bidding program and taken substantive action to eliminate it,” Ryan explained. “AAHomecare is dedicated to building upon this effort and making sure this new requirement is effective for the next round of bidding and addressing the drastic cuts in non-competitive bidding areas that are due to take effect on Jan. 1, 2016.

“While fixing the sustainable growth rate (SGR) for Medicare physician reimbursement, AAHomecare is pleased that Congress and the White House have agreed to address a major flaw in the compeitive bidding program by including the Tiberi/Larson binding bid bill language in H.R. 2,” said Jay Witter, senior vice president of AAHomeare government affairs. “AAHomecare will now work to address the major reimbursement cuts to non-competitive bid areas areas starting in 2016.”

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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