FAMES and FAHCS Discuss Competitive Bidding Concerns with CMS Deputy Administrator Blum

From: VGM

The Florida Association of Medical Equipment Services (FAMES) and the Florida Alliance of Home Care Services (FAHCS) met with CMS Deputy Administrator Jonathan Blum on Feb. 23 in a “listening session” to discuss the competitive bidding program. According to FAMES, the entire session was spent discussing the issues and problems that have occurred since the implementation of Round One. FAHCS also reported that it seemed that Blum used the session to collect data to improve Round Two of the program.

Below are the updates as they reported to their respective members. VGM thanks both FAMES and FAHCS for sharing their information about the meeting.

Report from FAMES, sent February 23, 2011:

FAMES members met this morning with Jonathan Blum (Deputy Administrator and Director – Center for Medicare), Robert Foster (Special Assistant – Office of the Regional Administrator CMS <Atlanta Office>), Elaine Hensley (Chief Ombudsman CBIC), and Letisha Davis (CBIC Ombudsman – Miami area).

FAMES would like to thank FAMES members Sam Jarczynski (RX Stat), Don Sotto (Medical Care Services), Terry Bennett (American Home Patient), Sharon Hughes (American Home Patient), Tom Kruse (Hoveround), William Haylon (Neighborhood Diabetes), Roger Dearmas (Florida Home Respiratory and Equipment) Lori Danford (Wuesthoff DME), Kamen Jenkins (Weusthoff DME), Louanne Maier (Wuesthoff DME), Gene Sego (Sego Medical) and Alan Cross (FAMES Board member) for taking the time to attend this meeting especially since this meeting was planned on short notice.

Mr. Blum and Mr. Foster spent the entire time talking with us about some of the issues/problems that are occuring since Competitive Bidding began in January.

Concerns discussed were:

• The bidding process itself including “suicide bids”, rejected contracts, and the lack of transparancy in the bidding process.
• Out of State Suppliers using subcontractors
• Winning bidders with little or no experience with the items won
• No one has seen a dramatic increase in referrals
• If a provider did not win bids in all categories, they are not getting referrals
• Non-winning bidders who grandfathered are trying to get winning bidders to accept their “problem” patients
• More education is needed for Doctors and Discharge Planners
• A winning bidder who accepts an oxygen patient prior to the 36 month cap will receive at least 10 months payments. If they accept a capped concentrator (as they are required to do) they receive no payment.
• Winning bidders are receiving supply requests from non-winning providers. They are having a very difficult time getting the proper documentation to support the supply.
• Diabetic supplies are not profitable at the rate set by competitive bidding. Many mail order diabetic companies are not answering their phone. Increased audits and paperwork is making it difficult for providers to take these supply patients.
• Many providers have had to lay off staff and so it is even more difficult to track down all of the required paperwork, even for a new referral.

Mr. Blum and Mr. Foster also want to hear of any problems that Doctors offices and Discharge planners have shared. If you know of any situations, please let me know. Mr. Foster has asked that I write up a summary of what we discussed and forward it to him.

The hour we spent with CMS was quick but many issues were presented to CMS by the providers (both winning and non-winning bidders were in the mix) that this program are negatively effecting.

Again, thank you to the FAMES members that took time out of their day to attend this meeting.

Joan Cross, Executive Director, FAMES 

Report from FAHCS, sent February 23, 2011

Today FAHCS participated in a listening session with Jonathan Blum Director of the Center for Medicare Management which oversees competitive bidding in DMEPOS.

The meeting was a last minute effort by the Director to get feed back from bid winners and others about what is happening in First Round areas since the implementation of the program.

We are very thankful to the Medicare Ombudsman who invited FAHCS to attend and encourage us to bring a few of our members. FAHCS attend with a cadre of bid winners in multiple categories, winners in a single category and non-winners, each with their own perspective on the program; no one with a positive perspective.

Other FAHCS members were present in the less than 20 person crowd. Mr. Blum was collecting data, it seemed, to better Round 2, but at the same time he did want to understand the status of Round 1.

His first question was “How is it going” the first response was by Fino Randazzo, active FAHCS member and a winner in Oxygen. Fino informed everyone that he won in oxygen, but because he won in only one category he is not getting any calls, because hospitals normally discharge patients who need oxygen and a hospital bed or other items, which he cannot provide. “Winning in one category is the same as winning in none, we are getting no business and that is the same with everyone who won in only one or two items” he said. This also demonstrates potential capacity issues.

After that, points were raised for one hour straight by most all present. FAHCS members talked about the affects of audits and paperwork and the imbalance of CMS cutting payments while increasing the cost of paperwork by audits and prepay review. Discussion were held about the problems with diabetic supplies, and how the new prices only allows old technology to be affordable, with which patients are unfamiliar. There was a substantial conversation about oxygen delivery delays that have kept people in hospitals for days at a time, when previously patients were released in hours.

The competitive bidding Ombudsman confirmed many of the concerns.

At one point Mr. Blum expressed he was under the impression that the bidding process itself was much improved over 2008. FAHCS responded vigorously talking about the lack of transparency and the fact that we still do not know who set the bid. “We have information that over 90% of bid winners are being reimbursed less and sometimes substantially less than they bid. The question was who set the bid” said Sean Schwinghammer of FAHCS. All the providers confirmed they are paid rates much lower than they bid.

FAHCS raised the issue of education, informing the Director that 80% of the hospitals in Palm Beach County did not know the program was to take affect in their area one week before implementation because they assumed the MSA’s name, Miami Fort Lauderdale and Pompano Beach, did not include their county. We emphasis the problems with the slow release of information and bid winners, which was supposed to be 90 days prior to the start of the program but was only 30. We brought out sub-contracting problems and patients concerns. FAHCS has been riddled with patient calls complaining about the inability to find providers, complaints about delays, complaint by patients who have to call out of area or state to order equipment and then have different companies come into their homes which are not with the company they called. Patients are fearful, they do not understand grandfathering, repair rules and why they cannot get the products their doctors ordered. We also discuss our evidence of patients who were kept in the hospitals for 3 days just to find a walker and power wheelchair patients who have gone 6 weeks and still cannot find any winning provider who will work with them.

Issues were raised by FAHCS members about power wheelchair repair issues, typically non winners receive calls for maintenance but send out service people to only find that a battery is dead or a wheel is broken, which are repairs that are not allowed to make. Money and time are wasted daily, this while winning providers are not willing to service some patients because they will lose money on the calls.

Complaints were rampant and all confirmed the program can be seen as nothing less than a complete failure, yet. Mr. Blum stayed quiet. He took copious notes but other than asking attendees to elaborate, he asked no questions.

This was not a venting session. Many people had direct facts about their industry and the program, AMEPA was mentioned for its analysis of out of area bid winners ( 62% from out of area in Orlando) and its survey of providers. The most important reference to AMEPA was a comment by another FAHCS member who spoke up at the end, when the actual prices being discussed. This bid winning member said “AMEPA and VGM told us not to, but we did suicide bid in the hope we could float our businesses long enough until this program went away. Now it looks like we may not survive.” It was communicated very clearly to Mr. Blum from nearly all the winners of multiple categories that they fear for their survival as well.

From the provider stand point it was a good meeting, a lot of information and problems were conveyed. The Ombudsman seemed to agree that there have been a lot of complaints even thought CMS reports no problems.

At the end off the meeting FAHCS presented a letter to Mr. Blum along with nearly 3 dozen letters from providers and patients telling their stories of how bidding has hurt them.

Now it is up to CMS, as it always has been, to react. We hope to meet again with Director Blum. We are hopeful that they will act on the information.

Thank you to all those who participated in the meeting and provided letters. Only by engaging CMS and congress can we make change happen, before it is to late.