But the only way for such a proposal to gain traction is for the home medical equipment industry to exert as much pressure as possible on members of Congress to back the bill, stakeholders said.

At a hearing called by his subcommittee May 6, Stark labeled the bidding program "somewhere between flawed and lousy" and said he would work with the industry on an alternative.

“We expect Mr. Stark to be introducing a bill [this week]. He is committed to a speedy consideration of the bill, but whether they are able to attach it to a Medicare package that goes to the Senate or whether it goes on its own, it will need significant support,” said Cara Bachenheimer, senior vice president, government relations, for Elyria, Ohio-based Invacare.

Bachenheimer said HME providers must continue to make their case for a delay in implementation of the CMS project by citing its numerous flaws and the resulting devastation to beneficiaries, as well as to the industry.

“CMS is not going to budge without, literally, an act of Congress,” Bachenheimer said. “We’ve just really got to increase the noise level across the country,” she emphasized. “Every senator and every representative needs to hear from their constituents … This is crunch time.”

News of the impending bill follows weeks of intense industry efforts to inform Congress about the lengthy list of problems with the program, which is set to be implemented July 1.

Among a multitude of issues, questions have surfaced on the integrity of the bidding process; allegedly improper bid disqualifications; unclear provisions regarding subcontracting; beneficiary access; protection of small business; accreditation and licensure; and the quality of service bid winners with no experience in the product category will be able to render to patients.

To press those and other concerns, the American Association for Homecare sponsored a fly-in May 21 that sent 160 stakeholders to see legislators on Capitol Hill. The same day, the House Small Business Subcommittee on Rural and Urban Entrepreneurship held a hearing on competitive bidding that AAhomecare said raised “grave doubts about CMS’ claims of improved accuracy, savings for taxpayers, fairness to small businesses and ensured access and quality for beneficiaries.”

A clinician call-in the following day--with participation from some 20 advocacy and clinician groups--registered more than 1,500 calls to legislators asking for a complex rehab carve-out from competitive bidding.

In addition, letters citing serious concerns about the bidding program and asking for its delay have been sent not only by industry members but by members of Congress themselves to key House and Senate committee chairs, CMS and Department of Health and Human Services Secretary Michael Leavitt.

While all of this is positive, stakeholders warned this is not the time to back off.

“The next three to four weeks are very critical,” said Tyler J. Wilson, president of AAHomecare. “This is not the time for people to pat themselves on the back and say, ‘I went to the fly-in and now let’s just sit back and let the process go on.’ We have to continue to make our voice heard, make sure the beneficiaries know what they will face if this goes through. Keep up the pace, keep up the pressure. We are in a critical phase here.”

Wilson said the industry is calling for a one-year delay of round one and 18 months for round two of competitive bidding.

“The goal of the delay is not just delay for delay’s sake,” he said. “It’s designed to give Congress time to reassess whether competitive bidding is the best mechanism for home medical equipment.”

With implementation of the program just a month away, he noted, “there continue to be a lot of problems. Nuts-and-bolts issues have not been properly addressed by CMS and all … the unanswered questions and the failure of CMS to do adequate education is going to come together in a morass [of problems].”

Even as industry power-hitters were talking to lawmakers and government officials, more problems were surfacing, this time related to CMS’ announcement of the round one bid winners.

On May 19, CMS released the names of 325 contract winners in the first 10 competitive bidding areas. CMS officials said contracts were offered to 23 percent of the providers submitting bids. They also noted that about 50 percent of the contracts went to small suppliers, those with revenues of $3.5 million or less. (See HomeCare Monday Special Alert, May 19.)

After analyzing the information, however, stakeholders questioned not only CMS’ figures but also raised numerous other questions.

“The biggest concern is the licensure issue in Ohio and Florida, where there are more than a handful of providers who don’t appear to hold licenses in the state,” said Bachenheimer, referring to the two states’ requirement that home oxygen suppliers be state-licensed (see “Oxygen Licensure Is Issue for Some Bid Winners” in this issue).

Under competitive bidding rules, winning bidders must be in compliance with all applicable laws, Bachenheimer said. If some providers are unlicensed in areas where licensing is required, she said, “then those bids should have been thrown out on that basis alone.”

CMS has sidestepped questions on that issue by pointing to the fact that the companies are accredited, according to Julie Piriano, director of rehab industry affairs for Quantum Rehab, a division of Pride Mobility Products, Exeter, Pa.

“All the companies are accredited,” she said. “The real issue is that [accrediting organizations] were directed to assess companies for accreditation based on quality standards; however, the quality standards are still in draft form.

“That’s where the concern comes in,” she continued. “None of the accrediting organizations has a tool with which to work to assess the companies they were assessing.”

Another concern, Piriano pointed out, is that 155 standard power wheelchair providers received contracts but only 31 of them won complex rehab contracts as well. That means, she said, that a beneficiary using a standard chair who needs to ratchet up to a custom rehab device very likely would not be able to work with his/her current provider.

The provider with the standard wheelchair contract but no complex rehab contract “would need to refer it out, and that beneficiary would need to start the process all over again with somebody different,” Piriano said, adding that shift could impede service times.

She noted there are three major “worry areas” where this could likely happen: the Pittsburgh, Kansas City and Miami CBAs.

“There are only four complex rehab providers in each of those markets,” she said.

Piriano also said there are concerns that some providers who were awarded complex rehab contracts have never serviced that segment before.

“There are some basic competency issues,” agreed Bachenheimer. “[Many] providers did not win in their core competency; they lost in their core competency.”

As well, there are educational issues. In call-ins to CMS and in other forums, providers have pressed the agency on when and how it would educate beneficiaries on the coming changes, particularly since there are only a few weeks left until the program takes effect.

“It’s an expectation coming from CMS that we will indeed help educate beneficiaries,” said Wilson. “But our efforts have to be complemented in a significant way with efforts from CMS.

“There are just a lot of unanswered questions,” Wilson continued. “Unlicensed contractors being awarded contracts, questions about capacity; questions about providers who don’t have a history of providing products in a certain category, questions about providers that are new to a geographic area.”

There are so many unanswered questions, he said, that competitive bidding cannot be allowed to move forward.

However, Wilson and others are fully cognizant that if the industry is successful in getting a delay, it will need to somehow pay for the savings CMS says it would have reaped under competitive bidding.

“How do you pay for that delay? The offset that we have offered in a measured way until we know what the numbers really are is that this industry would be willing to look at an across-the-board cut in DME depending on the size of the cut needed,” Wilson said. “We’re willing to give something back in order to stop the clock.”

While providers won’t know what size cut they have to come up with until that information is released by Congressional Budget Office, Wilson said the offer of an across-the-board cut was made with the stipulation that “this would be the only cut this year to DME. We are not willing to talk about additional cuts in the oxygen benefit and power mobility,” both of which have been on the table in recent months.

As the legislative push for delay gains momentum, Wilson said AAHomecare is also pursuing probable legal action.

“While we continue to press on the legislative front, we are examining and really setting in motion what we need to do to pursue a court challenge to competitive bidding,” he said. “HHS has not met its statutory mandate and has not done the things they were required to do.”

The association is working with the Washington law firm of Sidley, Austin to compile the necessary data to pursue an injunction that would halt implementation of both rounds one and two, he said.

Already, one injunction against competitive bidding is being sought by Cleveland-based Walter & Haverfield LLP, which is handling a lawsuit backed by Last Chance for Patient Choice, an educational entity created by Waterloo, Iowa-based VGM to fight competitive bidding.

Whether legislatively or legally, whatever happens has to happen fast.

“We’ve got three to four weeks to get this resolved,” said Bachenheimer. “This is no time for a vacation.”

Among a barrage of detail-oriented queries, a range of topics included subcontracting, patient residency, what will happen in cases where contract winners are not licensed (if required) in states where they won bids and what exactly is being done to educate beneficiaries about the impending changes.

With just a few weeks left before round one is scheduled to take effect July 1, CMS allowed one-and-a-half hours for the May 27 session, designed to field questions about exactly how the bidding program will work. The time came and went with a ceaseless flow of calls--and not everyone got their questions addressed.

Following is a sample of questions from those who made it through the call-in queue.

--Jurisdiction: What to do when a patient's residence conflicts with his or her billing address
An Ohio caller asked about a patient who was being solicited by a winning bidder in Florida--but the patient resided in a nursing home in Detroit. The caller explained that the confusion in this situation derived from the fact that the patient's Power of Attorney is located in Florida.

In answer, CMS' Joel Kaiser, deputy director of DMEPOS policy, said, “If the beneficiary's permanent address is in a competitive bidding area but they are receiving services in an area outside of the competitive bidding area, then we would consider that beneficiary in 'travel status.'”

Kaiser's answer actually raises more questions, according to industry consultant Sylvia Toscano of Professional Medical Administrators in Boca Raton, Fla.

“If a patient resides in Wisconsin, let's say, but their sibling or son or daughter handles their Medicare affairs and that relative resides in a CBA, the permanent address with Medicare is listed as the relative's address,” Toscano, who listened in on the conference call, explained. “The item of DME such as oxygen would need to be provided by a contract supplier but there are no contract suppliers in Wisconsin because they are not in round one. How does the patient receive their equipment? How would a local supplier be paid under the Medicare program in this instance?”

--Licensure: What happens when bid winners are not properly licensed to serve a bidding area?
Rob Brant, a Miami provider and president of Accredited Medical Equipment Providers of America (AMEPA), asked Kaiser what would happen with those companies--at least eight of them in the Miami CBA alone, according to Brant--that won bids but do not have an oxygen license in the state of Florida.

“The contract suppliers were accredited to furnish the items they have been awarded a contract for,” answered Kaiser. “If you have information about a specific contract supplier where you think they were accredited for something inappropriately then you should send an email to us and we will research it.”

Kaiser's answer, which addressed accreditation, confused Brant.

“[Kaiser] kept saying 'We put the responsibility on the accrediting body.' But he is not even answering the question as to whether they checked the licensure,” Brant said. (For more, see "Oxygen Licensure Is Issue for Some Bid Winners" in this issue.)

--Subcontracting: Can we or can't we?
Toscano asked Kaiser the following question: “The article off of the [National Supplier Clearinghouse] Web site states that CMS interprets [section] 1834 of the Social Security Act to mean 'A supplier receiving payment from Medicare must be the entity furnishing and billing for the items or services, specifically a supplier cannot contract with other entities to provide essential services.' Are we allowed to subcontract for competitive bidding if we did not have an agreement in place at the time that this was filed?”

Kaiser's response: “Yes, you may subcontract. The contracted supplier is the one who will be submitting the claims for reimbursement. The contracted supplier is the one who is responsible for meeting the terms of the contract and ensuring that the items and services that are paid for under the DME benefit are provided. It is the contractor who is doing the billing. They may subcontract with other entities to provide various services for DME.”

Toscano then pointed out that Palmetto GBA's Web site states that “suppliers may not contract with other entities to provide essential services as the supplier is the entity receiving payment for Medicare, and therefore must be the one providing the items or services.”

Kaiser said he would have to consult with CMS' Office of Financial Management to get clarification on the issue.

“Can you explain 'essential services'?” Toscano persisted.

”I think we need to wait and get that answer from our supplier enrollment, supplier standards experts, who are not here today,” Kaiser said.

--Grandfathering: What should providers be doing?
Kaiser noted that CMS' new Chapter 36 of the Internet-only claims processing manual includes a section on grandfathering. “This relates to individuals who are receiving oxygen and oxygen equipment, or rented DME, from a supplier currently,” he told listeners. “We provide guidelines for the supplier regarding their decision to remain as a grandfathered supplier, giving the beneficiary that option, or what they should be doing if they elect not to be a grandfathered supplier. And that goes along with the whole transition issue.

“We're expecting current suppliers, who obviously have to notify the beneficiary if they are not going to grandfather, when they are going to pick up the equipment. There are obviously rules on when they can pick up the equipment, so they will have to be making arrangements with the supplier about that. They will have to be communicating with beneficiaries to make those arrangements and supply that information as to whether they are going to continue to provide services to the beneficiary.

“And if they are not, then the guidelines provide for them to refer the patient to a contracted supplier and to go through the channels to locate a new contract supplier,” Kaiser said.

--Beneficiary Outreach: What has been done and what is allowed?
Several callers expressed confusion over the proper procedures for beneficiary outreach. One caller asked whether current Medicare rules governing the methods of direct contact between a provider and a beneficiary still apply under competitive bidding.

“My related question is that now that these contracts are announced, are the winning bidders free to advertise and communicate with the marketplace subject to those preapproval rules?” he asked, noting that some of his customers had been contacted by contract winners and told they would have to change providers because his company had not won a contract.

A CMS official responded, “We are not establishing special marketing guidelines for contract suppliers under this program. All of the current DMEPOS supplier guidelines that apply as far as marketing continue to apply. For example, the current prohibitions on cold-calling Medicare beneficiaries when there is no prior history of service and also prohibition against misusing the word Medicare and Medicare symbols continue to apply.”

Another caller asked what CMS has been doing to ensure beneficiaries are ready for round one.

“What type of communication is going out to the beneficiaries directly? The thousands of patients that are on service right now today--how are we communicating with them? Who is going to help them in transitioning if a supplier is not going to grandfather? Who is taking the lead on helping that patient that's laying in their bed, unable to get the mail or anything?” the caller asked.

The response: “We don't have representatives here from the communications staff … but [we're] using every avenue we can. We have organizations of the state health insurance programs who are helping to reach beneficiaries. There is going to be a mailing to beneficiaries in bid areas. [We have an] extensive network of advocates for beneficiaries who are going to be helping us with education.”

The caller pressed, “Who is helping the patients who don't go out of their homes? Who don't go to meetings? I just don't understand how CMS is going to reach those patients to tell them what is going on.”

The response: “We don't have the beneficiary outreach people here so it's hard to give you, really, specifics. We'll try to have someone here next time.”

During the conference call, agency representatives referenced two tip sheets--one on grandfathering and another for referral agents--that would be posted to the CMS Web site. They also said providers should notify beneficiaries of their decision on grandfathering by June 1.

“According to the teleconference," said Toscano, "a non-contracted supplier that elects not to become a grandfathered supplier must provide notification to the beneficiary. So they are asking in the next 30 days [that providers] notify every single rental patient that has a piece of rental equipment. If the patient chooses to switch, the supplier must pick up the equipment.

“We're supposed to notify each beneficiary, get the letters back and arrange for pickup if necessary and tell them to visit the Web site or make the phone call all within the next 30 days. I think that's an undue burden on a lot of suppliers, especially if they have thousands of rental patients,” Toscano continued, adding she believes that “no beneficiary education has been done [by CMS] to date.

“They promised intensive outreach and education. None to our knowledge has been provided,” she said.

For more on the agency's new tip sheets, see "CMS Issues Tip Sheets for Grandfathering, Referral Agents" in this issue.