How to Fight Competitive Bidding
When one considers the Centers for Medicare & Medicaid Services’ national competitive bidding program, it’s hard not to picture the bumbling Keystone Cops — only these Keystone Cops aren’t funny. It’s a program meant to police DME, but instead threatens to unravel home medical care. Providers must fight the program.
While NCB is well intentioned — it’s an effort to drive down costs to the taxpayer while standardizing care and coverage for home care patients — the result thus far has been unsettling to say the least. Providers are worried, patients are worried, and now members of Congress are worried. Their chief worry? That competitive bidding will diminish quality of care for patients and undermine the viability of HME providers’ businesses.
These concerns are well founded. As it stands two sets of economists have independently raised concerns about the program’s viability as a competitive bidding model. To begin with, the program appears to have not taken into consideration the law of unintended consequences and specifically did not consider the behavior of the bidders, who would most likely bid just low enough to get a contract, which means that if the costs of providing those services increase in the future, the winners will be “cursed” with even tighter margins. This will prompt those providers to cut costs from their business models even further, which will ultimately reduce competition and lower the quality of care for patients, essentially negating the program’s intent.
So how do providers fight competitive bidding?First, know the current state of play. The results from round one echo the economists’ concerns. As it stands, 63 percent of all the bids from round one were disqualified, with 603 of 1,005 providers nixed from the process. To complicate matters further, the American Association for Homecare has reported that it received at least 150 complaints from providers who say their bids were disqualified due to irregularities on the part of the Competitive Bidding Implementation Contractor (CBIC), which receives and reviews competitive bids, and should not have been disqualified.
Where the winning bidders are concerned, CMS awarded some bidders across multiple categories and MSAs, which forced out some local players. In fact, one bidder, the Scooter Store, won across all of round one’s 10 MSAs. In terms of pricing, an average 26 percent cut was made to fee schedules for those winners.
That said, CMS is pushing forward with NCB round two, which affects 70 MSAs across the country, and the accreditation deadlines are coming up fast. Providers in those MSAs must apply for CMS accreditation by July 21, and attain accreditation by Jan. 14, 2009 in order to submit their bids and bill Medicare.
Know what’s happening on the legislative front. These developments, particularly the volume of provider complaints over the disqualifications, echoed by the lobbying efforts of state and national industry associations, have resulted in Congress waking up to the fact that a key component of the national health infrastructure is in jeopardy.
As a result, two bills have been entered into the House and Senate calling for at least an 18-month delay for implementation of competitive bidding. The two bills are H.R. 6252, which was introduced by Representatives Pete Stark (D-Calif.) and David Camp (R- Mich.), which has 80 co-sponsors, and S.3144, introduced by Senators Max Baucus (D-Mont.) and Charles Grassley (R-Iowa), which has nearly 30 co-sponsors. At press time, Representatives were gearing up to vote on the House bill.
Contact your congress members. Regardless of how the vote goes, providers should continue to contact their congress members to voice their opposition to competitive bidding. The key is to ensure that you clearly state your case as to how NCB will affect patients (i.e., voters) in their district or state, and what they can do to oppose it. In the case of the House bill, the vote might already be up, but the Senate Bill has not yet been put to a vote.
Meet with your congress members. Schedule an in-person meeting with your district representative to express your concerns over NCB. Note that there is a very good chance you will actually meet with staff, rather than your representative, which can actually be a benefit. Staff members will often be more well versed in the policy issues than the representative for whom they work. Don’t turn the meeting into a complaint session. Clearly convey why competitive bidding will be a problem for the district, and how they can help stop it.
Enlist the help of patients. Patients are voters and have as much, or more, sway as you do over the course of action your congress members take. Educate them on the issues affecting their coverage and the services your provide them, and enlist their help. Encourage patients to contact and meet with their members of congress, as well.
Points to take away:• Understand why competitive bidding, in its current form, is not a viable solution.
• Get up to speed on how it is currently affecting the industry and your patients.
• Be aware of legislative developments.
• Contact your congress members and try to meet with them in person to get them to understand why competitive bidding is not working, and how they can help delay and hopefully either fix or stop it.
• Enlist the help of patients to lobby, as well.
This article originally appeared in the July 2008 issue of HME Business.