Stark And Health Subcommittee Grill CMS Over Bidding System Problems, USA

Main Category: Medicare / Medicaid / SCHIP
Also Included In: Caregivers / Homecare
Article Date: 08 May 2008 - 2:00 PDT

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

"The system is somewhere between flawed and lousy," said U.S. Representative Pete Stark (D-Calif.) in yesterday's House Ways and Means Health Subcommittee hearing on the Medicare competitive bidding program. The hearing was held because of concerns Stark and his colleagues have heard from constituents in the homecare community.

In opening remarks, members of the Health subcommittee were sympathetic to the plight of the home medical equipment provider saying the program needs to be examined. However, Ranking Member Jim McCrery (R-La.) advocated going forward with the bidding program saying, "we have to hold out hope for helping to control cost."

Kerry Weems, Acting Administrator for CMS, sat alone on the first panel and faced a group of combative congressmen. Weems' testimony focused on cost savings and education programs with charts and graphs included in his presentation. But members of the Subcommittee asked pointed questions about problems with the program such as the disqualification of 63 percent of bidders in Round One, choosing median pricing rather than lowest pricing, and not allowing willing providers to supply products at the lowest price.

Stark asked pointed questions about how the prices were chosen from the bids. As Weems explained how median prices were determined to be the best choice, Stark expressed concern that this was price setting, saying "Sounds like you're price setting to me. Sometimes you're bidding, sometimes you're not. It's at your convenience." Stark also asked what CMS had learned from the Round One of bidding and what they would change about the program for the Second Round. Weems said, "I can't think of anything I would change." Stark's questions ended with, "I think I've seen you're a useless witness."

The harsh questioning continued from every member of the panel, with specific questions including "why not more bids?" and "would a 60-day delay to explore issues from Round One help?" The Members also asked about subcontracting and clarified that subcontractors do not have to be accredited until September of 2009, although Weems said it would be a "bad business decision" on the part of the contract winner to enter into a relationship with a non-accredited company.

Rep. Xavier Becerra (D-Calif.) pressed Weems on the responsibilities of subcontractors in the bidding program, forcing the acting CMS Administrator to admit on the record that the accreditation requirement was for the contract supplier and does not apply to entities the supplier chooses to subcontract with. Becerra said subcontractors should be held responsible as well and highlighted the fact that subcontractors with no experience could be utilized. He also noted that it seems counterintuitive to have competitive bidding yet limit the number of contractors, stating that a more open competitive process would ensure better prices.

Reps. Lloyd Doggett (D-Texas), Phil English (R-Pa.), Sam Johnson (R-Texas), Mike Thompson (D-Calif.), and Pat Tiberi (R-Ohio) all pressed Weems on a range of issues including fraud, transparency in the bidding process, inexperienced contract winners, and accreditation.

Weems said Round One contract winners would be announced next week.

The second panel consisted of Tom Ryan, representing the American Association for Homecare (whose testimony was highlighted in yesterday's AAHomecare Bidding Alert). The panel also had Kathleen King, director of health care, U.S. Government Accountability Office; Peter W. Thomas, health task force co-chair for the Consortium for Citizens with Disabilities; Thomas J. Hoerger, Ph.D., a senior fellow at the Research Triangle Institute (RTI), a contractor that studied the demonstration projects for competitive bidding.

Tom Ryan, past chairman of the American Association for Homecare and CEO of Homecare Concepts, provided testimony on the industry's concerns about competitive bidding, saying, "This Medicare bidding program is a train wreck. But as this program jumps off the tracks, the attitude of CMS is clearly 'full steam ahead.'" Ryan called for an immediate halt to the program.

Ryan told the Subcommittee, "The wide range of problems and questions about the program must be independently evaluated, and an alternative process to determine payment rates for home medical equipment must be explored."

The hearing reinforced Congress' interest in the program and Members made it clear that the system needed to be changed. Stark said he was not sure that he could come up with a legislative fix for this year but hoped to resolve the issue soon.

Let's keep up the volume of concern about this bidding program and make sure Congress understands the value and importance of homecare.

American Association for Homecare