Small Business Subcommittee Leaders to SBA: Tell CMS to Delay National Competitive Bidding

Tell the Centers for Medicare & Medicaid Services (CMS) to delay national competitive bidding (NCB) until the true impact on small businesses can be determined: That’s the message a Congressional subcommittee had for the Small Business Administration (SBA).

Leaders of the U.S. House of Representatives’ Committee on Small Business, Subcommittee on Investigations & Oversight, sent a letter to the SBA on Dec. 12. Its request of the SBA: Ask CMS to delay the scheduled implementation of competitive bidding in July 2008 “until the Office of Advocacy can sufficiently assess the economic impact of the rule on small businesses.”

Subcommittee on Investigation and Oversight chairman Jason Altmire and ranking minority member Louie Gohmert authored the letter, which expresses concern that competitive bidding will adversely affect small and rural DME businesses throughout the country.

“The DMEPOS industry is overwhelmingly a network of small- to medium-sized businesses serving relatively small service areas,” the letter says. “In fact, CMS estimates that approximately 85 percent of registered DMEPOS suppliers are considered small, according to the SBA definition. In its final rule, CMS states that ‘the DMEPOS supplier industry is expected to be significantly impacted by this final rule’... It is imperative that Advocacy conduct a timely review of the available facts, including a comprehensive economic analysis in advance of any final implementation of the CMS DME competitive bidding rule.”

The Subcommittee letter added that at a recent Subcommittee hearing, “the small business community raised legitimate concerns that they will not be able to compete with large, national firms in the bidding process, thus threatening local jobs and patient access to care.”

In explaining their position and their concerns, Altmire and Gohmert pointed out that few DME suppliers are able to realistically participate in the program: “CMS anticipated roughly 15,000 suppliers would participate in the initial bidding process, yet only 2,200 were in a position to even submit bids. Once the competitive bidding program has taken full effect, as few as 20 suppliers on average will be initial bid ‘winners’ in each MSA (metropolitan statistical area), putting small suppliers at a tremendous disadvantage.”

The first round of competitive bidding is due to be implemented by CMS in July of this year. Bids were accepted from suppliers through Sept. 25, 2007; CMS has yet to announce winning bidders in the first 10 MSAs taking part in the program.

The next round of competitive bidding, to include 70 additional MSAs, is due to get underway this year, but CMS has yet to announce the MSAs or when it will begin accepting bids from suppliers interested in competing.

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