New Senate Bill 3920 Seeks Competitive Bidding Reform


The U.S. Senate now has its own bill that would reform national competitive bidding for DME.

The bill, S. 3920, was introduced Sept. 20 by Sen. Orrin Hatch (R-Utah) and Sen. Kent Conrad (D-N.D.). Like the so-called Hobson-Tanner bill (H.R. 3559) currently in the U.S. House of Representatives, the Senate version of the Medicare Durable Medical Equipment Access seeks to reform current national competitive bidding policies by making the following changes:

  • Requiring that quality standards are in place before competitive bidding begins.
  • Restoring appeals rights to providers participating in competitive bidding.
  • Exempting rural areas (metropolitan statistical areas with fewer than 500,000 people) from competitive bidding.
  • Requiring the Secretary of Health and Human Services to conduct a comparability analysis before the Secretary can take a low winning bid from any area of the country and apply that same bid price to other areas of the country.
  • Requiring the Secretary of Health and Human Services to prove a cost savings of 10 percent or more for any product prior to being able to include it in competitive bidding.
  • Allowing qualified small providers to continue to supply DME to Medicare beneficiaries, even if the small providers do not win the bid (also called the "any willing provider" provision). A small provider would be defined as one with annual sales of less than $6 million per year, but who meets the required quality standards and submits a bid that is less that the existing Medicare allowable.

The American Association for Homecare (AAHomecare) reported that Hatch, in introducing the bill, expressed concerns that beneficiary access would be impeded if competitive bidding is allowed to proceed in its current form.

"Any provider not awarded a contract would be prohibited from participating in Medicare for up to three years," AAHomecare quoted Hatch as saying. "This bill would allow applicable small businesses that did not receive a contract to continue to provide durable medical equipment in Medicare at the competitive acquisition bid rate."

AAHomecare is urging DME suppliers to contact their senators to express support for S. 3920, and to urge those senators to cosponsor the bill. According to AAHomecare, the House version of the bill had 145 co-sponsors as of Sept. 22.

John Gallagher, the VGM Group's vice president of government relations, pointed out that now is the right time for dealers to seek support from their legislators.

"We've got to be very diligent till Nov. 7, while our (Congressional members) still need us," Gallagher said during a VGM breakfast meeting at the recently concluded Medtrade industry show in Atlanta. "We as a collective are moving together much better than we ever have."

H.R. 4994 Would Exempt Rehab from Competitive Bidding

H.R. 4994 Would Exempt Rehab from Competitive Bidding

In addition to the two bills — H.R. 3559 and S. 3920 — that aim to reform national competitive bidding, there's another that seeks to officially exclude high-end rehab and assistive technology from the program altogether.

H.R. 4994, sponsored by Rep. Ron Lewis (R-Ky.), is the Medicare Access to Complex Rehabilitation and Assistive Technology Act of 2006.

In the bill, complex rehab and assistive technology products are defined as "medically necessary adaptive seating, positioning, and mobility devices and speech generating devices that are evaluated, fitted, configured, adjusted or programmed to meet the specific and unique needs of an individual with a primary diagnosis resulting from injury or trauma or which is neuromuscular in nature. Such a primary diagnosis includes spinal cord injury, traumatic brain injury, cerebral palsy, muscular dystrophy, spinal muscular atrophy, spina bifida, amytrophic lateral sclerosis, multiple sclerosis or any other disease or disability identified by the Secretary as requiring the use of such devices."

When suppliers discuss the importance of carving out rehab from national competitive bidding, the National Coalition for Assistive and Rehab Technology (NCART) suggests talking about what complex rehab and assistive technology are, who is served by these products, and that such products are based on individual need.

"Competitive acquisition does not work well when unique products, configurations or specific combinations of products are needed in order to successfully meet the clinical needs of an individual," NCART says in its talking points bulletin.

NCART also suggests explaining the importance of evaluations and assessments conducted by qualified rehab and assistive technology professionals when complex rehab products are involved, and how competitive bidding will force suppliers to eliminate these services from their budgets.

NCART also emphasizes that the amount of equipment included in the bill's exemption would be very limited — approximately 3 to 5 percent of all DME. Therefore, the financial repercussions of such an exclusion would be relatively mild.

Rita Hostak, NCART president and VP of government affairs for Sunrise Medical, said during the Sept. 20 NCART update at Medtrade in Atlanta that The Moran Company was currently scoring the rehab/assistive technology exemption so legislators can be told what the carve-out would be expected to cost.

This article originally appeared in the October 2006 issue of Mobility Management.

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