Texas Providers to Congress: Rescind Competitive Bidding IFR

IRVING, Texas - On March 30, Texas providers met with Congressional representatives to discuss flaws in the competitive bidding program and lobby for the suspension of the Centers for Medicare & Medicaid Services' (CMS) interim final rule (IFR).

Sitting in on the meeting were James Williams, director of outreach coordinator for Rep. Kenny Marchant, R-Texas; Andy Ritter, regional director for Sen. John Cornyn, R-Texas; Eric With, director of outreach coordinator for Rep. Michael Burgess, R-Texas; Taylor Bledsoe, district director for Rep. Pete Sessions, R-Texas; and Deanna Kuykendall, representing Rep. Sam Johnson, R-Texas.

Doug Harrison, CEO of The SCOOTER Store, New Braunfels, Texas, organizer of the event, started the meeting by explaining that just because the program has a pretty name doesn't mean it's good for health care, business or beneficiaries.

"This is America with free enterprise and capitalism. Who could be against competitive bidding?" he questioned.

The presentation sought to answer that question by outlining the major drawbacks of the program for Texas, especially the large area covered in the Dallas-Fort Worth area and the issues with the previous implementation. Harrison estimated that 1,700 providers were included in the first-round competitive bid area (CBA) of Dallas-Fort Worth, which encompasses approximately 9,000 square miles. Of those providers, fewer than 100 were awarded contracts. As a result, many businesses are in danger of going under and nearly 3,000 will lose their jobs, Harrison estimated.

"That's the biggest concern: How do you put together a program that doesn't eliminate jobs?" says Mark Leita, senior director of government relations, The SCOOTER Store.

Last year, winning bidders were expected to achieve considerable growth overnight in order to accommodate the patients in their CBAs. For standard power wheelchairs, the winning bidders in DFW had 14 percent of marketshare in 2007. After winning the bid, however, their businesses were expected to grow more than 600 percent over night. Glucose monitor bid winners had an even greater obstacle, needing to grow by 3,000 percent.

"I don't know how many of you have grown your business by 3,000 percent in a year," Harrison joked. He said he can't see that kind of growth happening over night, especially for oxygen, which is a capital-intensive business.

The presentation cited real-world examples from the two weeks that competitive bidding was in effect last year. Pulmonologists in DFW, for example, reported that they could not get oxygen services delivered for two to three days. Prior to competitive bidding, the time was two to three hours. As a result, patients had to stay in the hospital longer, which inevitably cost Medicare more money. Also, many out-of-state bid winners for CPAP, walkers, enteral nutrition and oxygen were rejected because the contract providers could not service the area and did not have the equipment.

During a provider comment period, Barry Johnson, president of Texas Medical and secretary of the Accredited Medical Equipment Providers of America (AMEPA), pointed out that health care is not an industry that lends itself to competitive bidding.

Johnson also noted that approximately 70 percent of all HME is service, not the cost of equipment.

Wayne Leavitt, Mobility Medical Equipment, spoke for smaller providers, explaining that if he does not win a bid, he will need to lay off half of his employees. He pointed out that on top of cuts, CMS is now demanding a surety bond that will further reduce HME profits. On top of that, Leavitt estimated that he lost approximately $100,000 to become accredited, including the cost of accreditation, overtime hours for the accreditation process and business lost while time was devoted to becoming accredited.

"We don't mind taking some price cuts but... what other business can take a 10-percent cut and survive?" Leavitt asked.

Harrison estimated that nationwide more than 90 percent of home care providers risk closure as a result of competitive bidding.

This article originally appeared in the June 2009 issue of Mobility Management.

About the Author

Elisha Bury is the editor of Respiratory Management.

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