CRE Testimony to the CMS Program Advisory Oversight Committee

Testimony of the Center for Regulatory Effectiveness

Before

CMS Program Advisory Oversight Committee

June 4, 2009

I am Jim Tozzi of the Center for Regulatory Effectiveness.  We are a regulatory watchdog organization focused on ensuring federal agency compliance with the “good government” laws that regulate the regulatory process.  These laws include the Paperwork Reduction Act, the Regulatory Flexibility Act, and the Data Quality Act, also known as the Information Quality Act. We frequently participate in FACA processes and I serve on a FACA committee sponsored by another agency.

I am here to recommend that this committee request that CMS furnish it with information documenting that it has complied with the requirements of the DQA with respect to DMEPOS competitive bidding.  CMS’ own DQA implementing guidelines require development of such documentation.  

In brief, the Data Quality Act requires that agencies ensure that the information they disseminate complies with quality standards set by OMB and the agency before it is released. This quality assurance process is known as pre-dissemination review.  The Act also gives affected parties the right to “seek and obtain” correction of information that may not meet quality standards.

In discussing their extensive pre-dissemination review process and criteria, CMS explains that the “the quality assurance process begins at the inception of the information development process. Information released by CMS is developed from reliable data sources using accepted methods for data collection and analysis, and is based on thoroughly reviewed analyses and models.”

CMS’s Guidelines further explain that the agency “reviews the quality (including the objectivity, utility, and integrity) of information before it is disseminated and treats information quality as integral to every step of the development of information, including its creation, collection, maintenance and dissemination.”

In addition to the basic level of quality assurance that takes place throughout the pre-dissemination review process, CMS has an even higher set of standards for information which is “influential.” CMS states that “Information is considered influential if it will have a substantial impact on important public

policies or important private sector decisions.” There is no question that the competitive bidding information is influential under the DQA.

The pre-dissemination review standards for influential information are not only higher than for other information, they directly relate to and require the advice of this committee.  The guidelines state, influential information “should include a high degree of transparency about data and methods to facilitate its reproducibility by qualified third parties.”

Moreover, and this is the part of Data Quality pre-dissemination review process that calls for this committee’s participation, the guidelines state, “Where estimates and projections may not be easily reproduced by third parties due to the complexity and detail of the methods and data, greater emphasis is placed on periodic review by outside panels of technical experts.”  Thus, this committee’s work forms a crucial part of CMS’ pre-dissemination review process for the competitive bidding information.

We have written CMS highlighting their Data Quality responsibilities with respect to five specific competitive bidding issues; Level II HCPCS Codes, Beneficiary Demand, Supplier Capacity, Composite Bids, and Pivotal Bids.

Collectively, these five factors determine the structure of the competitive bidding program.

We recognize the difficulty CMS might have in simultaneously documenting their data quality assurance actions in all five areas.

Consequently, we are asking that CMS to initially furnish information regarding agency compliance with only their pre-dissemination review actions concerning supplier capacity determination.

As CRE stated in its letter to CMS:

“In order to fulfill its Data Quality responsibilities, CMS needs to release for PAOC and public review and comment the agency’s algorithm for calculating the supplier capacity for each product category in each of the bidding areas as well as the pre-dissemination review record demonstrating the algorithm meets Data Quality standards.”

Our recommendation is in keeping with the statutory requirements for this committee. Specifically, the MMA states that one of this that one committee’s goals is to provide advice on the “establishment of requirements for collection of data for the efficient management of the program.”

Therefore, I request that this committee ask CMS for their documentation demonstrating that the agency’s supplier capacity determinations will comply with the DQA.