Suspend Round One, Urges American Association For Homecare Letters To Key Committees In Congress

Main Category: Caregivers / Homecare
Also Included In: Medicare / Medicaid / SCHIP
Article Date: 23 Apr 2008 - 2:00 PDT

email to a friend   printer friendly   view / write opinions   rate article

In letters to key House and Senate committees that oversee Medicare, the American Association for Homecare has urged a delay in Round One of bidding. The letters detail severe problems related to Round One of competitive bidding and specifically issues related to due process, fairness, and patient access to care.

One letter was sent yesterday to House Ways and Means Committee Chair Charles Rangel (D-N.Y.), Ranking Member Jim McCrery (R-La.), Ways and Means Health Subcommittee Chair Pete Stark (D-Calif.), and Health Subcommittee Ranking Member Dave Camp (R-Mich.). Another letter was sent to House Energy and Commerce Chair John Dingell (D-Mich.), Ranking Member Joe Barton (R-Texas), Energy and Commerce Health Subcommittee Chair Frank Pallone (D-N.J.), and Ranking Member Nathan Deal (R-Ga.). A third letter covering the same topics was sent today to Senate Finance Chair Max Baucus (D-Mont.) and Ranking Member Charles Grassley (R-Iowa). See http://www.aahomecare.org to view a full text of the letters.

An excerpt from the letters, signed by AAHomecare President Tyler J. Wilson, follows:

"AAHomecare requests that you exhort CMS to delay Round 1 of the DME competitive bidding for 6 months or however long CMS needs to correct the identified problems because Round 1 has been fraught with procedural and operational flaws that threaten the integrity of the entire competitive bidding program. These problems include, among others: (1) the Competitive Bidding Implementation Contractor's (CBIC) inappropriate rejection of qualified bids due to misplaced or overlooked documentation that was properly and timely submitted by suppliers; (2) inappropriate disqualification of bids due to purported "financial stability" reasons, which neither the CBIC nor CMS has ever explained during or after the bidding process; and (3) an apparently arbitrary and capricious process regarding how the CBIC or CMS used providers' self-reported capacity to determine how many winning providers were needed for each market.

Not only do these deficiencies raise due process issues, they also present serious questions about the subsequent rounds of competitive bidding with respect to fair supplier selection and patient access to quality suppliers. Despite CMS' inability to remedy the mistakes and address the significant and material concerns raised by bidders in Round 1, CMS, nevertheless, intends this summer to begin implementation of Round 2. The only way to prevent the recurrence of avoidable mistakes and faulty implementation of the competitive bidding program is to delay Round 1 for at least 6 months or however long necessary in order for an adequate review to be undertaken and the numerous problems resolved. Without this step, it is unlikely that Round 1 will be implemented properly or that Round 2 bidders can be fairly selected in a manner that will ensure cost savings without sacrificing beneficiary access and quality of care.

Additionally, AAHomecare requests that Congress demand that CMS resolve supplier disqualifications from Round 1 in a transparent manner. Our membership has contacted us about individual experiences with implementation problems, some of which have been reported publicly while others have been only privately shared. CMS has yet been unwilling to share meaningful bidding data and the methodology and criteria used to establish new Medicare payment rates and the criteria by which suppliers were evaluated. By refusing to release critical data, CMS is impeding an open assessment and dialogue with the DME community that is pivotal for the program's overall success. By making the bidding process equitable and transparent, CMS will be benefiting not only patients but fulfilling Congress' intent in implementing an effective competitive bidding program. Certainly Congress and CMS intended to afford these suppliers who have historically served the Medicare program with integrity and care with a fair selection procedure that is consistent with due process.

Without your oversight and efforts to ensure proper implementation of this federal health care program, Medicare beneficiary access to quality products and reliable supplier services may be critically curtailed, not only in Round 1, but in subsequent expansions of the program."

Also, AAHomecare included a four-page attachment to the congressional letters that summarizes the key implementation problems related to Round One of bidding. The examples document the specific problems and provide a more detailed basis for AAHomecare's call for a delay to Round One of bidding and investigation of the numerous problems. Highlights from that summary follow:

Disqualification Based on Allegedly Improper or Insufficient Financial Documentation: The CBIC disqualified many suppliers for failure to submit proper or sufficient financial documentation with their Request for Bid ("RFB"), which is notated as reason "BSE-4" in CMS' notification letter to losing bidders. Submission of appropriate financial information is critical for the CBIC to evaluate the existing and potential financial health of the bidder and its ability to furnish all the necessary items during the contract period. Yet, CMS published no standards and the CBIC was inconsistent in its instructions and assessment of what information was necessary.

More importantly, it remains unclear what the necessary documentation standards are. This inconsistent guidance and treatment means that potentially qualified bidders were arbitrarily rejected and calls into question the fairness of the overall process. Delay of Round 1 would allow CMS to provide clearer guidance on what types of financial documentation is required.

Disqualification Based on Failure to Justify or Respond to Supplemental Requests: CBIC disqualified certain suppliers for failure to reply within the required deadline for supplemental requests for supporting documentation, which is notated as reason "BSE-3" in CMS' notification letter to losing bidders. Yet, some suppliers have clear evidence, such as Federal Express receipts and fax confirmations, to support claims that they provided the supplemental information requested by CBIC within the required time frames. CMS and its contractor, the CBIC, should be required to assess the validity of these disqualified suppliers' claims and improve its documentation tracking systems to prevent the recurrence of these administrative mistakes. These errors resulted in potentially qualified bidders being denied the opportunity to participate and may have, instead, resulted in a less qualified bidder pool serving Medicare beneficiaries.

Disqualification Based on CBIC's Failure to Notify Supplier of Deficiency: The original RFB rules on CBIC's website stated that the CBIC will inform suppliers of any deficient documentation; the original RFB rules said that "beginning 10business days before the bidding window ends, suppliers will be notified if there are any missing hard copy attachments." These were the rules in place as of May 2007, and upon which suppliers relied, as they navigated the cumbersome and confusing bid process. However, on September 13, 2007 (just prior to the bidding window's closing date of September 25), CBIC revised this RFB rule without any type of notice to the bidding community. The new rule required "bidders to check the completion status of their electronic bids and verify receipt of hard copy documents by the CBIC" and allotted 15 days after the bidding window ended to allow for such verification. This abrupt change in the rules that shifted the responsibility of notification from the CBIC to the individual suppliers was not known by all of the suppliers, especially those who had submitted their bids in a timely fashion, prior to the modification of the rules, and who had no reason to believe future action by them was required.

Disqualification Based on CBIC's Failure to Incorporate Modifications to Bid: We are aware of at least one supplier who acquired another supplier entity prior to the opening of the bidding period and timely submitted its bid using the acquired entity's supplier numbers. The National Supplier Clearinghouse ("NSC") "froze" all of the newly acquired entity's provider numbers. Thus, the acquiring entity obtained new supplier numbers and submitted a new bid. The CBIC informed the acquiring entity that the prior bid would be purged. However, the CBIC then disqualified the acquiring entity's bid based on submission of two bids.

Disqualification of Accredited Suppliers: Certain suppliers reported that they were erroneously disqualified for failure to meet accreditation deadlines when they had been accredited in a timely fashion.

Awards to Inconveniently Located Bidders: In its final rule, CMS allowed out-of-area providers to bid on product categories and markets in which they have no physical presence or experience. For certain beneficiaries, the closest service center of a certain winning bidder is in a different state or located up to 8 hours away.

Rejection of Suppliers' Bids for Criteria Never Communicated to Bidders: CBIC rejected certain suppliers' bids for submission of particularly low prices for codes that had no or very minimal utilization. Certain bidders had strategically submitted very low prices for underutilized HCPCS codes within a product category, even though those prices had very little effect on the bidders' final composite scores due to the weighting methodology used by the CBIC. Yet, CBIC completely rejected such bids without recognizing or considering that suppliers may legitimately have been able to afford these low item prices. Moreover, CMS never clearly notified bidders that this type of bidding strategy would be inappropriate.

Technical and Operational Problems: The competitive bidding implementation process has been plagued with technical and operational difficulties and inconsistencies. Suppliers encountered uncertainty, complexity, and confusion during every step of the bidding process, including the unstable online bidding application which lost painstakingly entered data, the shut-down of the bidding application website for up to 24hours at a time, and multiple, last-minute deadline extensions. The deadline for suppliers to submit bids for participation in the first round of the program was originally 60 days after issuance of the RFBs in May 2007. In addition, CBIC provided documented instructions that were inconsistent, leaving suppliers to guess at the "right one." For example, there was inconsistent instruction related to what types of past and current sanctions should be identified in a supplier's application under Section N of the RFB.

American Association for Homecare
2011 Crystal Drive, Suite 725
Arlington, VA 22202 703-535-1881
http://www.aahomecare.org