Lawmakers call for delay of DMEPOS program

From: Modern Healthcare

By Rachel Landen

Lawmakers on both sides of the aisle have asked CMS  Administrator Marilyn Tavenner to delay the second-round implementation of  Medicare’s Durable Medical Equipment Prosthetics, Orthotics and Supplies  (DMEPOS) competitive bidding program, scheduled to take effect July  1.

Reps. Glenn Thompson (R-Pa.) and Bruce Braley (D-Iowa) have circulated  a letter urging their congressional colleagues to press Tavenner to halt Round  Two of the program through the end of the year.

DMEPOS, established by the Medicare Modernization Act a decade ago, was created  to set more accurate payment rates for medical equipment and supplies by having suppliers submit bids to the CMS  for equipment like wheelchairs, hospital beds and oxygen supplies for which it  had historically overpaid, with the first round rolling out in January 2011.  Round Two would add an additional 91 markets to the nine already included under  Round One, as well as reimburse a single payment amount for diabetic testing  supplies.

Nearly 150 other lawmakers have signed a May 17 letter, citing  alleged problems with lack of transparency, lack of binding bids during the  contract process, improper vetting of firms, and violations of state licensure  and accreditation requirements. A number of industry groups that would be  affected by the expanded competitive bidding program, including members of the Advanced Medical Technology Association  (AdvaMed), support the delay.

But others want the program to move  forward. “We’re very encouraged by Round One results,” Stacy Sanders, federal  policy director at the Medicare Rights Center, a beneficiary advocacy group,  said.

The CMS credits the program with saving about $202 million on  durable medical equipment in its first year, with an expected $25.7 billion in  savings to the Medicare Part B Trust Fund between 2013 and 2022. Earlier this  year, the CMS estimated that for Round Two, Medicare will pay, on average, about  45% less than its current fee schedule amounts for eight product categories  including hospital beds, oxygen equipment, wheelchairs and scooters. Payment  amounts for the national mail-order program for diabetic testing supplies are on  average 72% less than fee-schedule rates.

Many health policy experts have  recommended an expansion of competitive bidding as an essential part of  reforming Medicare to control costs and reduce the program’s long-term funding  shortfall.

But many healthcare industry groups, as well as lawmakers  argue that the program should not continue in its current form. Lobbying by  industry groups long has blocked Medicare from using competitive  bidding.

In a speech to the U.S. House of Representatives on Tuesday,  Thompson said the competitive bidding process was anything but. “There was  nothing competitive about it,” he said. “(It) was intended to reduce Medicare  costs, ensure that beneficiaries have access to quality services. In practice,  the system denies competition while worsening access to goods and services and  harming seniors.”

Richard Price, senior vice president of payment and  healthcare delivery policy for AdvaMed—a trade association that represents  healthcare technology and device companies—agrees.

“We learned in the  eleventh hour that CMS has awarded winning bids to suppliers who did not meet  the requirements set out by CMS itself for bidders to actually participate in  the bidding process, let alone the program,” Price said in an interview. “They’ve awarded contracts to bidders who are not licensed to provide services  in the states for which they’ve been awarded contracts.”

Meanwhile,  certain other suppliers who were licensed prior to submitting bids to the CMS  did not win contracts. Price says this raises issues of access to care and  access to products that physicians want their patients to have. “Suppliers who  weren’t licensed shut out other suppliers who were licensed,” Price said.

But other observers disagree that the program jeopardizes Medicare  patients’ access to critical medical equipment. Sanders said the Medicare  Advocacy Center’s national helpline for beneficiaries has not seen any increase  in calls related to access concerns. If concerns arise, Sanders said there are  appropriate safeguards in place to deal with them, including the competitive  acquisition ombudsman office that was created to respond to and resolve related  program inquiries and complaints.

“There’s not enough evidence to suggest  these access issues, these concerns—related to supplier bids, size of the  bidding area—are going to come to fruition or the size and scope,” Sanders  said.

Still, the American Association for Homecare, which represents  healthcare providers, equipment manufacturers, and other organizations in the  homecare field, would like to see the current program halted. “We’ve had  longstanding concerns about the way it’s being implemented,” said Tyler Wilson,  president of the organization. “We’ve had many of these issues during Round 1.  They’ve persisted and only grown on the run-up to Round 2.”