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CMS IDs HCPCS Specifics Targeted for Competitive Bid
BALTIMORE--In its run-up to the implementation of competitive bidding, CMS has released the specific HCPCS codes that will be included for products in the first round of Medicare DMEPOS bidding, currently set to begin later this month.

As posted on the Competitive Bidding Implementation Contractor Web site, the 10 product categories targeted for bidding and the number of codes in each category follow. For a list of all codes included in each category, click here.

1. Oxygen Supplies and Equipment - Oxygen Accessories (9 purchased items)
1.A. Oxygen Supplies and Equipment - Payment Class A (4 rental items)
1.B. Oxygen Supplies and Equipment - Payment Class B (2 rental items)
1.C. Oxygen Supplies and Equipment - Payment Class C (2 rental items)
1.D. Oxygen Supplies and Equipment - Payment Class D (2 rental items)
1.E. Oxygen Supplies and Equipment - Payment Class E (2 rental items)
2. Standard Power Wheelchairs, Scooters, and Related Accessories - E0950 - E2621 (61 purchased items)
2. Standard Power Wheelchairs, Scooters, and Related Accessories - K0015 - K0829 (47 purchased items)
3. Complex Rehabilitative Power Wheelchairs and Related Accessories - E0950 - E2369 (40 purchased items)
3. Complex Rehabilitative Power Wheelchairs and Related Accessories - E2370 - E2621 (40 purchased items)
3. Complex Rehabilitative Power Wheelchairs and Related Accessories - K0015 - K0864 (50 purchased items)
4. Mail-Order Diabetic Supplies (9 purchased items)
5. Enteral Nutrients, Equipment, and Supplies (16 purchased items)
6. Continuous Positive Airway Pressure Devices (CPAP), Respiratory Assist Devices (RADs), and Related Supplies and Accessories (20 purchased items)
7. Hospital Beds and Related Supplies (31 purchased items)
8. Negative Pressure Wound Therapy Pumps and Related Supplies and Accessories (4 purchased items)
9. Walkers and Related Accessories (17 purchased items)

10. (Miami and San Juan Only) - Support Surfaces (group 2 and 3 mattresses and overlays) (6 purchased items)

According to CMS' final rule on competitive bidding, published in the April 10 Federal Register, providers must bid on all codes within a product category. CMS will then figure a weighted "composite bid" for each bidder, and will use those composite bids to select contract winners.

As of Friday, additional information on the competitive bidding program--including composite bid weighting factors for each code--was listed on the CBIC Web site as "coming soon."

Access the CBIC home page at www.dmecompetitivebid.com for a list of the 10 MSAs selected as initial competitive bidding areas.

For a detailed explanation of the competitive bidding program, including how winning bids will be chosen, click here for a PDF of the complete final rule (401 pages).

For a replay of the April 11 Open Door session, call (800) 642-1687 and use conference ID 2739332. The recording will expire on Friday, April 20.

Emerging Provider Networks Scramble to Revise Plans
ATLANTA--With plans shattered by surprise provisions regarding networks that appeared in the DMEPOS competitive bidding final rule, network members and facilitators spent last week trying to pick up the pieces and form them into new bidding strategies.

In the final rule, published in the April 10 edition of the Federal Register, CMS limited provider networks for the purposes of competitive bidding to 20 members, each of whom can have no more than $3.5 million in gross revenues. The draft proposal had placed a ceiling of $6.5 million on providers in networks; it did not include a limit on the number of providers in a network. It also required networks to centralize their billing, a provision that disappeared from the final rule.

"[CMS] got much more conservative about who could be in a network," said Jim Walsh, president and general counsel for The VGM Group in Waterloo, Iowa. "You have a much smaller footprint for networks and a much narrower reason for being in a network."

The changes threw emerging networks into a tizzy. "We've been working on these networks for over a year. We don't know what we're going to do," said Robert M. Arado, administrator of Med Trust Tampa Bay. Arado's HME company, Caremed Respiratory Services, spearheaded the Tampa networking effort. "We never expected this. We were blindsided by this rule that was never mentioned in the draft proposal."

The major issue, Arado said, is the cap on network membership. While Tampa was not included in the first 10 MSAs where competitive bidding will roll out, Miami was, and Arado was on his way there to assist sister organization Med Trust Corp. of Southern Florida. The Miami organization has about 90 members, he said, while the Tampa network has about one-third that number.

"We need to take a look at the numbers and look at the logistics," Arado said, noting that the $3.5 million figure is not a problem in Miami, but the 20-member cap is. "These are small, family-owned businesses that may have 50 patients, 100 patients, and they are getting referrals from a few doctors that favor them."

Without a network, there is no chance these companies could bid for a Medicare contract, he said.

Indeed, one of the stipulations of the final rule is that each member of the network must submit a statement certifying that it joined the network because it cannot furnish all of the items in a product category to beneficiaries throughout the competitive bidding area.

"For example, if you are bidding in the oxygen category and you don't have liquid oxygen and have never had liquid oxygen, it is unlikely that CMS will accept the bid from you because there is no proof that you could provide the product," Walsh said.

Under a network, however, a provider in such a position might stand a better chance of winning a contract because other members would likely have a history of providing liquid oxygen, he said.

Another reason for joining a network, according to Walsh, is that "CMS has indicated it will give preference to small businesses. A small business network that has enough of the market share in that [CBA] will likely get selected, because they would be omitting too many small businesses by excluding it." The final rule stipulates that 30 percent of the winning contracts in each bidding area be awarded to small providers.

But how can existing networks break up their members?

Arado said his group would likely consider establishing networks based on product categories. "If we have some providers that do nothing but power mobility, we might break them off. Same thing if all they do is mail-order diabetic supplies," he said.

CMS has said small providers can be members of more than one network as long as the networks are not competing in the same product categories in the same MSAs.

Walsh said while VGM is counseling its members to bid on their own if at all possible, "VGM will have networks in each product area in each MSA. If no one wants to participate, we are not disappointed. That just means they are doing what they should and bidding on their own."

But even as emerging networks scrambled to revise their plans, other concerns about networks were surfacing.

For example, Neil Caesar, president of the Health Law Center in Greenville, S.C., said future problems could arise from the stipulation that networks cannot have more than 20 percent of the market share in a particular product category in any one MSA.

If a network with less than that market share is awarded a bid and, over the three-year contract period enlarges its scope, "what happens in the next bidding round?" Caesar asked. "What happens when the network finds itself in a situation where it has to kick out people who have helped make it successful?"

As well, both Caesar and Walsh decried the lack of centralized billing. "Since there is no coordinated billing anymore, [providers] are operating autonomously," said Caesar. "It pushes you to a network structure that is very loose and low-tech."

Walsh said that CMS' abandonment of the centralized billing provision eliminated what was previously one of the selling points of a network.

Arado, however, thought that was a plus. "Originally, we would have had to have one provider number to bill for the whole network, and then the network would receive the payment in one lump and have to disperse it to all the entities. Now, each provider can still continue to submit its own claim and get electronic payments." Because of that, a network won't have to make a huge financial outlay for special software for each member in order to facilitate one bulk claim, he said.

However, while CMS will give networks bidder numbers, it will not issue separate supplier numbers.

"A lot of the things they are asking from the networks they are not asking from the big companies," Arado pointed out. "A network must use a main provider number in order to be assured a bidder number. That means that one of the companies in the network has to offer its number to use. The easier thing would have been to give the network a provider number of its own."

To protect its members, a network also has to purchase liability insurance, Arado said. "If one member goes bankrupt, the whole network would be exposed to the liability. Or if one is overpaid, the network is responsible for that--and not just the network but the company that gave its provider number."

But even with all the difficulties and risks, Arado still believes networks are the answer for small providers.

"I'm betting a business I have had for 15 years, along with 2,000 patients, and I am betting it on a network," he said. "Otherwise, I would have to go it alone."

This way, he said, at least he has a chance of survival in Medicare's new world.

Where Are Accreditation Applications from Providers in 10 MSAs?
ATLANTA--Although the first round of competitive bidding is set to begin later this month, several DMEPOS accreditors said they are seeing fewer applications than anticipated from providers in the 10 MSAs where the program will roll out.

Mary Nicholas, executive director of the Healthcare Quality Association on Accreditation said that while the organization was fielding calls from providers in the designated competitive bidding areas--mostly from the Dallas-Fort Worth-Arlington CBA--there had not been as many as she had expected.

"When I saw Texas was really checking in, I said, 'OK, we're going to see some of the other MSAs doing the same," Nicholas said. "But I haven't."

Although providers are asking more detailed questions, she said, she didn't "sense any urgency yet."

Sandra Canally, president and founder of The Compliance Team, said she is puzzled by the situation. "It's just mind-boggling," she said. "We've got the MSAs, we've got the products, we've certainly got an aggressive timeline as it relates to the bidding ... What are these people doing?"

Complicating the issue is the fact that CMS has not set a definite deadline by which providers must be accredited. Canally said CMS was supposed to be giving the accreditors a final date, but hadn't yet.

"I assume in the next week or so we should know a specific date," she said.

When CMS opened bidding registration last Monday, with a 60-day bid window to open late this month, the agency stipulated that suppliers must be accredited or be pending accreditation before submitting a bid. CMS has also said bid contract winners must be accredited, and that winners would be announced no later than December.

But without a concrete deadline, accreditors said they don't know if that means providers have until winners are announced (which some suspect could be even earlier than December), or until April 2008, when the bidding program is scheduled to be implemented. Regardless, they emphasized, unaccredited providers who want to bid must submit applications as soon as possible.

If CMS does require that providers be accredited by December, do they still have time to complete the process?

The answer is yes, according to Canally, who said her organization has created an accelerated two-month program for providers in the initial MSAs. Nicholas also said providers who are focused on completing the process can get through it in time. And Tim Safley, HME clinical advisor for the Accreditation Commission for Health Care, said that, as of Friday, accreditation could be completed within three to four months.

"Right now, we're ok," he said. But he added that inquiries are "way up," and if applications suddenly come flooding in, "that could change."

Nicholas also pointed out that providers waiting until the last minute could find themselves even more pressed for time. For example, a provider that fails an accreditation survey would have to resubmit for review. At HQAA, she noted, the board of directors, which meets quarterly, must approve such resubmissions, so a company that didn't pass a survey near the end of 2007 would have to wait for the board's January meeting.

The bottom line, said Canally, is that providers in the first 10 MSAs "all have to take action, and they all have to take action now, or they're going to be left behind."

For a list of CMS' 10 approved accreditation organizations, click here.

VGM: Competitive Bidding Targets Minorities, Poor
WATERLOO, Iowa--In a press release issued Thursday, The VGM Group said it is continuing its attack "on so-called 'competitive' bidding" for home medical equipment and services.

According to the buying group, U.S. Census data indicate that 31 percent of the population in the first 10 MSAs that will be bid sites is Latino, while only 15 percent of the country's population as a whole is Latino. The percentage of individuals living below the poverty level in the initial competitive bidding areas ranges from 13 percent in Charlotte, N.C., to 32 percent in Cleveland. Across the 10 areas, the poverty level is 19 percent, while only 13 percent of the U.S. population lives below the poverty level.

"Minority and poor beneficiaries are being used as guinea pigs to test the government's theory that 'competitive bidding' for nine product categories will result in savings to Medicare," said Mike Mallaro, VGM's CFO/CIO. Mallaro is also president of Last Chance for Patient Choice, a non-profit advocacy group backed by VGM.

"Because CMS will take the lowest-priced equipment without taking into account the service component that is such a large component of the HME industry, Medicare beneficiaries will be the victims of a two-tier health care system. Those who can afford to pay for technologically advanced equipment and traditional levels of service, which naturally cost more, will be able to do so.

"In the meantime," Mallaro continued, "poor patients and many minorities will be forced to accept the cheapest equipment from the lowest bidder. Why are poor people and Latino-Americans being targeted disproportionately? That is absolutely un-American and in my opinion, unconscionable," he said.

VGM said it is sending sample press releases to all of its members in the first 10 MSAs in hopes they will inform local media about the congressional competitive bidding mandate and its implementation by CMS.

VGM and Last Chance are also supporting lawsuits in two jurisdictions, most likely Texas and Ohio, to raise the issue of equal protection under the law in court, said Jim Walsh, VGM general counsel.

"The theory is that beneficiaries in bid areas are being treated as second-class citizens by the law that requires them to be served by HME providers who are hamstrung in their efforts to provide quality and products. The law effectively rewards providers, by allowing them to stay in business, for furnishing the cheapest equipment and the least amount of service," Walsh said.

"Elsewhere in the country, providers are supposed to be paid usual and customary prices in a highly competitive environment that rewards good service and high-quality equipment. That is a denial of equal protection of the law to those unfortunate enough to live in bid areas."

To view the VGM member media release, visit www.vgm.com.

For more information on Last Chance for Patient Choice, visit www.lastchanceforpatients.org.

Patient Groups Ask for End to 'Cruel and Arbitrary' Medicare Wait
ATLANTA--A coalition of 33 patient advocacy groups sent a letter to Congress last week asking the nation's legislators to strike Medicare's two-year waiting period for those with severe disabilities after they start receiving Social Security disability benefits.

The April 11 letter, sent to Senate Finance Committee Chairman Max Baucus, D-Mont., and other members of Congress, was signed by organizations including the National Multiple Sclerosis Society, Easter Seals, United Cerebral Palsy, the Rehabilitation Engineering and Assistive Technology Society of North America (RESNA) and others, including the New York-based Medicare Rights Center.

According to a press release from the MRC, people deemed disabled by the Social Security Administration due to incapacitating health problems are not eligible for Medicare until 24 months after they receive their first Social Security disability income benefit. The release said some 600,000 Americans with severe and debilitating disabilities are uninsured and go without health care or into debt while waiting the required two years for their Medicare coverage to begin.

"Congress must eliminate the cruel and arbitrary two-year wait for Medicare which punishes Americans who are hit by severe illness or injuries that make it impossible to keep working," said Robert M. Hayes, MRC president.

The two-year waiting period was originally established in 1972 when Medicare was expanded to include people with disabilities, the release said, noting that today there are two exceptions: people who are disabled due to amyotrophic lateral sclerosis (ALS) or end-stage renal disease.

The MRC also released a report, funded by The Commonwealth Fund, in which 21 people with disabilities share their experiences while waiting for Medicare after leaving work due to a variety of reasons including cancer, chronic cardiac conditions, a car accident and debilitating injuries.

"This report chronicles the devastating health and financial toll that the waiting period takes on the lives of hard-working Americans who are stranded without health coverage after they become disabled," said Hayes, an author of the report.

The MRC said that nearly 7 million people under age 65 qualify for Medicare because they have severe and permanent disabilities, with about 1.5 million Americans currently in the Medicare waiting period. Twelve percent of people in the Medicare waiting period die each year while waiting for their coverage to begin, according to the group.

Providing men and women with Medicare at the time that Social Security certifies them as disabled would cost $8.7 billion annually, the MRC said. This cost would be partially offset by $4.3 billion in reduced spending by Medicaid, which many individuals get for some time during the waiting period.

To view the MRC report, "Too Sick to Work, Too Soon for Medicare: The Human Cost of the Two-Year Medicare Waiting Period for Americans with Disabilities," click here.

In Brief
CMS will host a national conference call on the recently released NPI Compliance Contingency Guidance on Wednesday from 2:30 p.m.-4:00 p.m. EDT. For information and to register for the toll-free call, see www.noridianmedicare.com/dme/news/docs/2007/04_apr/npi_roundtable.html.

CMS has assigned a new contractor number to Cigna Government Services, which will take over as the new Jurisdiction C DME MAC on June 1. The new contractor/payer ID number is 18003. In addition, the states of Virginia and West Virginia will be moved from Jurisdiction B to Jurisdiction C. Consequently, effective June 1, all claims for Jurisdiction C will be processed by Cigna for Alabama, Arkansas, Colorado, Florida, Georgia, Louisiana, Mississippi, New Mexico, North Carolina, Oklahoma, Puerto Rico, South Carolina, Tennessee, Texas, Virgin Islands, Virginia and West Virginia. For more on the transition, visit the Jurisdiction C implementation information Web site at http://www.cignagovernmentservices.com/transition.

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