House Bill Would Delay NCB Start Dates, Exempt Complex Rehab

Rep. Pete Stark (D-Calif.), chairman of the House Ways & Means Health Subcommittee, has introduced a bill that would delay the start of Medicare competitive bidding's first and second rounds, and would exempt from competitive bidding complex rehab power chairs and accessories provided with those chairs.

In a June 12 press briefing, Tyler J. Wilson, president/CEO of the American Association for Homecare, said the bill "will terminate contracts awarded in round one, and round one areas will be rebid. New contracts would take effect 18 to 24 months from now or from when the legislation is enacted. Round two contracts would not take effect before January 2011, as proposed in the legislation."

In return for the delay, suppliers would take a funding cut for products that would have been included in the first round of the program.

"While the legislation proposed is not perfect - it's going to require home care providers to take a 9.5-percent, nationwide reduction in payment amounts for all items covered in round one of the bidding program - we understand that for the delay, there is a cost," Wilson said, adding that AAHomecare supports the bill.

Rita Hostak, president of the National Coalition for Assistive & Rehab Technology (NCART) said in a statement, "We are gratified and excited by the leadership shown by Congressman Stark to recognize the unique needs that are addressed by complex rehab and assistive technology, and that it deserves special consideration in the national competitive bidding program."

Hostak added, "We did not get everything we want; for example, complex manual wheelchairs are not exempted (in the bill). But we have sufficient time to work for their exemption in the future."

In return for the delay, the bill requires suppliers to take a funding cut for products that would have been included in the first round of the program.

"While the legislation proposed is not perfect - it's going to require home care providers to take a 9.5-percent, nationwide reduction in payment amounts for all items covered in round one of the bidding program - we understand that for the delay, there is a cost," Wilson said, adding that AAHomecare supports the bill.

On June 11, AAHomecare also filed a lawsuit to stop the competitive bidding program altogether, citing a number of critical flaws that will threaten timely beneficiary access to DME and threaten the existence of a number of small provider businesses.

AAHomecare said the current program's policies violate the Medicare Prescription Drug, Improvement and Modernization Act of 2003, the Small Business Act, and the Administrative Procedures Act.

"Our concern is that the Medicare program is deeply flawed, and it stifles competition and is going to limit programs for seniors because the program is designed to drive thousands of qualified providers out of the marketplace," Wilson said in the press briefing. "And as a result of that, it's going to severely limit the services available to millions of seniors and people with disabilities. Almost two-thirds of the accredited home care providers across the country that submitted bids in round one were disqualified. That was certainly an indication of the serious breakdown in the program."

As part of the press briefing, John Reed, VP/COO of PRO2 an oxygen provider in Cincinnati, discussed the impact of competitive bidding on his business. PRO2 won oxygen bids in Cleveland and Miami, but not in Cincinnati.

"The new fee schedule reductions will cost a company like mine more than $1.5 million per year in cash," Reed said. "To put that number in perspective, our company's total paid wages in Cincinnati in 2007 were $1.1 million. If we eliminated every single employee, we'd still need to come up with another $500,000 to break even on these fee schedule cuts. Our company's total purchases for equipment and supplies for the entire year were only $1.8 million. We would need to reduce our purchases by more than 75 percent to break even."

Reed predicted hospital stays would lengthen, because hospital discharge staff would be hard pressed to find a provider who could afford to send technicians and other staff to a patient's home to deliver and set up equipment at any time of the day or night.

"We're going to have to be extremely efficient in setting up service and delivery times to patients," Reed said, referring to reduced payments from Medicare under competitive bidding. Reed added that hospital discharge staff would also be affected: "You've also got a social worker who will now be making phone calls to an oxygen provider, a hospital bed provider, an enteral feeding pump provider and a walker provider for some of these patients."

Reed says winning bidders he's spoken to are being conservative when it comes to expanding their staffs and offices:

"Each and every one that I've talked to is not ramping up, if you will, in preparation for this program. They're preparing to serve patients in this program, but the common theme we've heard is that they will go forth with the least possible cost model and in going forth that way, they are prepared to be snowed under, if you will, if the phones start ringing drastically off the hook. But because of the uncertainty, the investment risk of adding staff and adding additional resources is really not being done, from the intelligence that I'm getting in the provider network."

Reed also said logistical problems are likely, given that so many suppliers don't have offices in the MSAs for which they won bids.

"We've had a number of small providers who've won bids with no intention of providing service," Reed said. "Their intention was to win the bid and sell the bid to a large provider like us. So there's a lot of movement underfoot, but very little movement underfoot related to buying equipment, hiring staff and getting out there."

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