The Big 10

Market Pricing Proposal

• By David Kopf
• Jan 01, 2012

True providers need to prepare for Round Two of competitive bidding, but they should be striving to stop it. That’s why we’ve broken out the market pricing proposal for 2012’s Big 10. It needs to be a stand-alone item. That said, stopping competitive bidding has been a bit of a Sisyphean exercise for the industry. How is this year different?

Let’s look at recent history. The industry has been trying since the original bidding of Round One to repeal CMS’s competitive bidding program, but has seen little luck. The industry started off the year trying to garner support for H.R. 1041, the bill introduced by Representatives Glenn Thompson (R-Pa.) and Jason Altmire (D-Pa.) that calls for the repeal of the bid program. At the close of 2011, the bill was hovering at 165 co-sponsors, which was encouraging, but not overwhelming.

This is because the industry took a moment to survey the political lay of the land and realized that repeal didn’t stand much of a chance given the current Congressional climate. The mid-term elections introduced a very “pro-cut” Congress; the notion of a repeal began to lose steam in the House, and never gained any real support in the Senate (no companion bill was introduced and no champion was identified in that branch).

So, the industry sought to offer an alternative instead: the Market Pricing Program, which aims to offer a replacement to competitive bidding using a market-based solution for setting reimbursement. This is exactly what Congress and CMS wanted when they crafted the national competitive bidding program, but does so in a way that doesn’t destroy the HME industry.

To create the MPP, the industry, working through the American Association for Homecare, took the various recommendations made by the more than 200 economists and auction model experts led by University of Maryland Professor of Economics Peter Cramton and put them into an industry proposal that was sent in a letter to Congress in mid October. The MPP provides a competitive approach to setting Medicare reimbursement rates for HME, but does so in a way that is actually competitive.

So, AAHomecare and other stakeholders drew up legislative language, and at press time (mid December), were working to attach the MPP as an amendment to H.R. 3630, The Middle Class Tax Relief & Job Creation Act, which was introduced by Rep. Dave Camp (R-Mich.), Chairman of the House Ways and Means Committee. The bill included a provision to prevent a 27.4 percent cut in Medicare physician payment rates slated to begin on Jan. 1, 2012, and instead increase payment rates by 1 percent in 2012 and again in 2013 — the “doc fix.” Various state and national HME industry associations were calling on providers to lobby their Senators and Representatives on behalf of the MPP.

Hopefully, the bill will pass the House with the MPP amendment attached. If it doesn’t, we can safely bet that providers and their state and national associations will be working to lobby on behalf of the replacement program. If it does pass, the industry will need to ensure the MPP also passes via the Senate version of the bill. If the MPP amendment doesn’t pass on either version, then the industry will have much work to do in order to see the MPP attached to some other legislation (or perhaps advanced by its own legislation). And in the event that the MPP passes all the way through, the industry will have much work to do in order to see that it is properly implemented.

No matter how the end of the year politics play out, the MPP will be the axis around which the majority of the industry’s political efforts will rotate during 2012. Providers will have plenty to contend with besides the MPP (such as the other nine members of this year’s Big 10), but the MPP should be their top priority in 2012.

This article originally appeared in the January 2012 issue of HME Business.