Stabenow Questions Berwick on Competitive Bidding

HomeCare Magazine

WASHINGTON — As the industry campaigns for CMS to release the names of providers whose bids were used to calculate Round 1 single payment amounts, Sen. Debbie Stabenow, D-Mich., sent a letter to agency Administrator Donald Berwick on Monday questioning a number of issues with the competitive bidding rebid.

A member of the powerful Senate Finance Committee, which oversees Medicare, Stabenow told the recently appointed CMS chief she is concerned about the problems that surfaced in the original round of bidding (2008) and wants to find out what has been done to fix them.

“Some bidders did not have the financial resources to ramp up to deliver services to a larger number of patients. Many had no experience in the product categories for which they were awarded bids,” Stabenow wrote. Those are among the reasons Congress stepped in to delay the program, she said.

“The healthcare community will again have very serious problems if it turns out once more that these companies are unable to provide sufficient access to quality items and services or do not have the financial ability to operate under the new contracted rates,” Stabenow concluded.

Those rates, averaging a 32 percent reduction, sent shockwaves through the industry. Many stakeholders have predicted that even those who put in the low bids won’t be able to sustain service under the steep cuts.

To view a sign-on letter from Reps. Jason Altmire, D-Pa., and Ralph Hall, R-Texas, asking CMS to release the list of providers whose bids were used to determine the Round 1 payments, see Altmire, Hall Call for Release of Bidder Names, Aug. 3. As of Wednesday afternoon, the letter had gained 122 signatures from House members.

The Aug. 9 letter from Stabenow follows in its entirety:

Dear Administrator Berwick:

I am writing today to ask for an overview of “Round One” for the Competitive Bidding Program for certain Durable Medical Equipment, Prosthetics, Orthotics and Supplies. Since Michigan has three metropolitan statistical areas slated to be included in Round Two, I am very concerned about whether Medicare beneficiaries’ needs will be disrupted and whether there will be a sufficient number of quality vendors to serve their needs.

During the initial Round One bidding process in 2008, a significant number of providers who signed contracts could not deliver services commensurate with their bids, and there were a number of problems that surfaced later. Some bidders did not have the financial resources to ramp up to deliver services to a larger number of patients. Many had no experience in the product categories for which they were awarded bids. It was for reasons such as these that Congress was forced to act and delay implementation of the program and required this re-bid.

Given these challenges in the first attempt at implementing Round One, I would like to have more information regarding CMS’s current efforts, including:

•  What changes or improvements CMS has made as part of the new Round One?

•  How have vendors’ concerns been incorporated into the new process? Will their feedback be incorporated into Round Two?

•  Will there be sufficient time between Round One and Round Two to evaluate and address any problems before Round Two begins?

•  What materials are being sent to beneficiaries about the “grandfathering” option and other changes?

•  How are providers being notified about whether they will be able to participate? When will information be publicly available to see how the rates were determined? My understanding is that the names of the winning providers [will be announced] in September although CMS has already announced information on the bids’ rates.

Thank you for providing me with an update on competitive bidding. My goal is to ensure that qualified providers have been chosen to provide these items and services to beneficiaries in Michigan. Michigan hospitals, physicians and elders who rely on home medical equipment services will be dependent on the winning-bid companies for these critical in-home products. The healthcare community will again have very serious problems if it turns out once more that these companies are unable to provide sufficient access to quality items and services or do not have the financial ability to operate under the new contracted rates.

Sincerely,

Debbie Stabenow