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CMS' Kuhn: 'We're Thinking about Round Two Already'
WASHINGTON--Home medical equipment providers from around the country got a reality check last week from CMS Acting Deputy Administrator Herb Kuhn.

Speaking at the American Association for Homecare's Legislative Conference, Kuhn told the group that CMS is moving toward full implementation of competitive bidding and will enforce its final rule on the program--mandated by the Medicare Modernization Act of 2003--as it stands.

"We're thinking about round two already," Kuhn said, adding that "what we learn in doing this first round will be absolutely essential for us as we make refinements for round two." He emphasized that providers in the initial 10-MSA roll-out must act now to get their bids in and to get accredited.

Because CMS is working on a "fundamental transformation" from being a passive payer of claims to an active purchaser of health care, Kuhn said, the agency is looking for value in the dollars it spends. That means focusing on prevention, pay for reporting, pay for performance, transparency, cost-effectiveness--"and yes, it also means competitive bidding."

While one provider said he thought Kuhn had done an "eloquent job of sugarcoating" competitive bidding, the message was not exactly what most attendees at the association's annual lobbying conference said they wanted to hear. An estimated 225 providers and industry advocates traveled to the nation's capital to push Congress for support of H.R.1845 and S.1428, companion bills that would ease some effects of the national bidding program.

Under the final rule, only providers that win contracts will be able to provide DMEPOS bid items to Medicare beneficiaries. The proposed legislation would allow qualified providers that had submitted bids to continue serving Medicare patients at the single-payment rates that are set.

In a question-and-answer period after Kuhn's June 6 speech, a provider asked whether Kuhn favored the legislative efforts, telling the CMS official he thought competitive bidding would "bring this industry to its knees and as a result put in jeopardy the patients we serve."

Kuhn responded that the agency has not taken an official position on the legislation. "What we're committed to right now is implementing the MMA and the competitive bidding program as part of the law," he said.

To another question on CMS' view of shortening the current oxygen rental cap from 36 to 13 months, Kuhn answered, "Nothing's changed on that ... that's still the administration's position on oxygen right now. We're part of the administration."

And asked why power mobility was included in the first round of bidding--on the heels of massive coding, coverage and payment changes in the sector--Kuhn said CMS' charge was to "really look at where the areas are we could have the greatest impact." After reviewing the volume of power mobility claims, he said, "we thought that it was absolutely appropriate for [power mobility] to be included in competitive bidding."

But many conference attendees complained that the bidding program is being rushed to implementation following a rule more than three years in the making. After release of its final rule April 2, CMS opened the first-round bid window on May 15 and has scheduled its close July 13. (See HomeCare Monday, May 21.)

If the current time frame for the program is maintained, providers pointed out, data from the first round of bidding won't be analyzed before the second round begins.

Several attendees said they hadn't really expected to hear anything different from Kuhn. "There are lots of questions about competitive bidding, and not enough answers and not enough time," said one angry provider, who asked not to be identified. "I give Mr. Kuhn credit for showing up--that took some courage--but he's lucky he got out of that room alive."

Also at the conference:

--Douglas Holtz-Eakin, Ph.D., former director of the Congressional Budget Office and economic policy director for the McCain 2008 presidential campaign, labeled competitive bidding as a "recipe for disaster." The economist said competitive bidding will keep new companies from getting into the market, thereby lessening competition.

An AAHomecare issues summary echoed that interpretation. "We believe in fair competition. But the Medicare competitive bidding program eliminates competition and it will reduce patient access to home care, the most cost-effective setting for health care in America."

--Several lawmakers gave attendees strong rallying calls before their lobbying visits to the Hill. "It's important to show that home care saves money," said Rep. Mike Ross, D.-Ark., the only HME owner in Congress. He added that providers should contact their representatives and invite them to visit. "You've got to get that message out," Ross urged his audience.

Rep. John Tanner, D-Tenn., who introduced H.R.1845, said 45 representatives have signed on as cosponsors of the competitive bidding bill. He added it will take from 75 to 100 to gain attention in Congress.

Sen. Arlen Specter, R-Pa., described a full plate for Congress with immigration, the war in Iraq, no child left behind and homeland security. But, he said, "you're on the right track being here in Washington. It's a crowded floor time, but maybe we can attach [your legislation] as an amendment or rider ... You've got to keep it up."

Specter said he would write HHS Secretary Mike Leavitt asking CMS to exclude complex rehab from competitive bidding, and offered to set up a meeting for an AAH committee with President Bush's nominee to head CMS, Harold Weems.

--Association delegates completed visits to more than half of all U.S. House and Senate offices to push for the competitive bidding bills and the Home Oxygen Patient Protection Act, which would repeal the Deficit Reduction Act's 36-month oxygen cap and return equipment ownership to providers. Before the lobbying push, H.R. 621, the House bill, had picked up 83 cosponsors. An identical Senate bill, S. 1484, was introduced shortly before the conference (see HomeCare Monday, June 4).

--The 25-member delegation from North Carolina met with all of that state's legislators. With a number of its members in the Charlotte CBA, the North Carolina Association of Medical Equipment Suppliers subsidized the Washington visits. Said NCAMES Director Beth Bowen, "Our board felt it was important for us to be here."

"This excellent showing is the result of hard work and leadership by many in the home care community. Our goal is to have home care advocates from all states and every congressional district come to Washington, and we will continue to shoot for that goal," said Tyler J. Wilson, AAHomecare president.

--AAHomecare elected a new slate of officers, including: Alan Landauer, CEO of Landauer Metropolitan, Harrison, N.Y., chairman; Joel Mills, president and CEO of Advanced Home Care, High Point, N.C., vice chair; Wayne Knewasser, vice president of Premier Home Care, Louisville, Ky., secretary; and Georgie Blackburn, compliance director for Blackburn's Physicians Pharmacy, Tarentum, Pa., treasurer.

Early Bidders Run into System Stumbling Blocks
ATLANTA--Web site glitches and lack of key information have delayed some providers' attempts to bid in CMS' national competitive bidding project--and the 60-day clock is still ticking, HME stakeholders said last week.

Product category bids in the 10 initial competitive bidding areas must be submitted by July 13.

"I have absolutely gotten quite a number of providers who have complained," said Rose Schafhauser, executive director of the Midwest Association for Medical Equipment Services. And, she added, "those are just the ones who called."

Providers trying to submit bids have been frustrated by trouble getting registered, a Web site that was down for days, user ID numbers and passwords that don't work and an inability to e-mail the site for help because it won't recognize their passwords.

At a competitive bidding forum during AAHomecare's Washington Legislative Conference June 5, providers reeled off a similar laundry list of problems with the system and detailed additional difficulties getting answers to questions.

Cynthia Wilson, general manager of UPMC (University of Pittsburgh Medical Center) Home Medical Equipment, complained that because the $6-billion health system is so big, she could not obtain a credit report for her company, one of the bid submission requirements. What's more, she pointed out, two of CMS' three designated credit reporting facilities only provide reports for individuals, not businesses.

"We keep submitting this issue" to the CBIC, Wilson said, "but no one is able to get us a straight answer."

Wilson also said she needed help working through the 5 percent common ownership rule and had a problem with the requirement to report finances on a calendar-year basis. "We work on a fiscal year," she said.

Wilson also reported the problems to Herb Kuhn, CMS acting deputy administrator, during an appearance at the AAHomecare conference. "According to statistics, we are the 18th largest Medicare oxygen provider in the United States," she told Kuhn, "but we're locked out of the bidding because of these technicalities."

At a bidders' conference on Wednesday, the CBIC announced it had added Dun & Bradstreet to the approved list of credit reporting companies and that financial reporting on a fiscal year basis was acceptable. (See "CMS Hosts Competitive Bidding Teleconferences" in this issue.)

"What we are finding--and, unfortunately, I don't think it's a surprise--gets back to this whole deal that [CMS] is rushing implementation," said Don Clayback, senior vice president of networks for The Med Group. "Because of a rush to the bidding process, they've started the structure but they're kind of learning as they go.

"While the people are trying to be helpful on the [phone helpline], it's been my experience that if it's not something very basic that can be read from a script, then you're referred to someone else and you have to leave a voice mail.

"Because of the complexity of competitive bidding," Clayback continued, "it's going to be a difficult process under the best of circumstances. Given the fact that some information just isn't available yet and that the response time to questions has been less than what they promised, it's adding to the stress for some providers."

Representatives of the CBIC apologized during a bidders' conference last week for site problems that prohibited providers from submitting bids. They said those problems should now be resolved.

But Miriam Lieber, president of Sherman Oaks, Calif.-based Lieber Consulting, called the bidding process "a landmine," noting that several of her clients had tried to submit bids but were unsuccessful.

In one instance, a downloaded form called for the top three HCPCS codes in the product category, but Lieber and her client couldn't access the information because the CBIC site was down. The CBIC helpline personnel couldn't tell them what the top three codes were and referred them to the Web site. Said a frustrated Lieber, "We can't get online to find out ourselves, [they] can't give it to me over the phone, so what am I supposed to do?"

For her client to bid only two product categories took two days to get through, Lieber said. "A lot of it has to do with the HCPCS codes that aren't exactly right. Some manufacturers don't have pricing, so if you don't carry a product, you have to be able to get a price. That makes it hard for a guy to bid."

In any case, she continued, information about the codes and other data came late in the game. "They released those top three codes after Memorial Day. Last time I checked, it was a 60-day bidding window. If I [wanted] to bid Form B, it wasn't there. How is that a 60-day bidding window?" she questioned.

Such difficulties prompted MAMES to enlist the aid of state Sen. Pat Roberts, R-Kan., Schafhauser said.

"Our whole push through the senator's office was trying to get this thing delayed and trying to get [CMS] to understand all the issues that providers are facing," Schafhauser said.

She and representatives from Roberts' office met with CMS officials on May 25, specifically about incorrect information being dispensed through the bidding helpline. Schafhauser said she pointed out that "the people who are on the front lines don't have the knowledge [CMS policymakers do] ... What if providers are taking what these people are saying verbatim? One person was told that it was just HME revenue that counted."

While the bidding process is a problem in some quarters, it doesn't appear to be so across the board.

Liz Moran of the Medical Equipment Suppliers Association said she hadn't heard too many complaints. "There have been people who have had hiccups, but any new system is going to have that," she said. "No one has called me and said they can't place a bid."

Raul Lopez, director of operations for Bayshore Dura Medical and president of the Florida Association of Medical Equipment Services, also said he was not aware of any difficulties but that "the majority of the [providers] will generally wait until the last of the bidding process."

Lopez said he had not yet submitted a bid for his company, which is located in the Miami bidding area.

While Lieber thinks it is possible that the process will so frustrate providers that some might simply pull out of the bidding, the greater fear for her and Schafhauser is that providers will wait until the last minute to begin bid submission.

"You're going to have mass mayhem, and what computer system is going to be able to handle that?" asked Schafhauser, noting that "now it is just normal times and [people] can't get through."

Lieber urged providers not to wait until the end of the bid window. "There's time left, but it's kind of scary. You need to get going now ... People who don't have their ID numbers, God help them."

To visit the CBIC Web site, go to www.dmecompetitivebid.com.

Buying Groups Launch Online Bidding Help
ATLANTA--Industry buying groups The Med Group and VGM Group have launched online tools designed to help members with competitive bidding.

Called the NCB Assistant, Med's new tool provides the structure to assemble required bid information and develop detailed unit pricing to submit bids, according to the Lubbock, Texas-based buying group.

Customized to each competitive bidding area, all 10 product categories are represented by each individual HCPCS code. Providers can load product acquisition costs as well as expected operating costs to help in developing their bids.

Using the tool, members can enter their operating expenses and required profitability data to arrive at a unit bid price. They can view gross margin and operating margin for each product, take a closer look at their net margins based on various cost structures and see what to expect given their potential bid amounts.

The new tool also integrates CMS' product weightings so that a potential composite bid amount for each product category is calculated, enabling users to view the exact information CMS will use in evaluating the financial side of a bid submission.

Meanwhile, Waterloo, Iowa-based VGM has recently added a subcontracting section to its Web site, which also includes competitive bidding data, forms and an instructional PowerPoint on preparing to bid accessible to all viewers.

In the new section for members, templates for a letter of intent and subcontracting agreement have been designed so that a potential contractor and subcontractor can quickly enter into a basic agreement, and then they can finalize the details through a more formal subcontracting agreement.

VGM is also creating a real-time bulletin board for it members to post that they will likely require subcontracting services and/or are interested in providing subcontractor services to a winning bidder.

Subcontracting "has been the biggest concern of, at least, the VGM members," said Mark Higley, the group's vice president of development. "Very few of them have entered into network agreements, just because of the timelines of developing the legal structure of the network. Subcontracting has far less hoops to go through to service either a particular product or a geographic area."

TriCenturion to Conduct PWC Probe
COLUMBIA, S.C.--TriCenturion, the Jurisdiction A/B DME program safeguard contractor, announced that it has started a widespread, pre-payment, probe review of the Group 2 standard captain's chair with patient weight capacity up to and including 300 pounds (HCPCS K0823). The review will be conducted in both Jurisdictions A and B.

In a bulletin issued last week, TriCenturion said data analysis was completed for dates of service Dec. 1, 2006, through March 31, 2007, on all new power wheelchair codes that went into effect on Nov. 15, 2006. The allowed amount for Group 2 power wheelchairs accounts for more than 90 percent of the total allowed amount for all new power wheelchair codes in each jurisdiction, the bulletin said.

More specifically, TriCenturion reported, the allowed amount for K0823 accounts for more than 77 percent of the allowed amount for Group 2 power wheelchairs in each jurisdiction.

"Widespread probe reviews are used to determine the extent of potential problem areas across multiple suppliers. TriCenturion believes a proactive approach to the increased provision of HCPCS K0823 will allow for identification of possible problems in the billing of this item," the notice said.

To evaluate compliance with Medicare coverage and coding rules and to identify contributing factors to the variance of expected treatment, the contractor said suppliers with K0823 claims billed to the Jurisdiction A or B DME MAC are subject to the review.

Suppliers whose claims are selected for review will receive an Additional Documentation Request letter asking for specific information to determine if the item billed complies with the existing reasonable and necessary criteria. If suppliers don't provide the requested information within 30 days, the claim will be denied.

Once the claims review has been completed, results will be analyzed and published in a PSC Medical Review article.

HCPCS Codes Change for Albuterol, Levalbuterol Claims
BALTIMORE--Effective July 1, Medicare will no longer pay claims for albuterol and levalbuterol (Xopenex) inhalation solutions under the J7611, J7612, J7613 and J7614 HCPCS codes, CMS said in a July Quarterly Update.

Instead, the agency said, new codes Q4093 and Q4094 will be payable for claims with dates of service on or after July 1. The new payment rate has not been announced.

In addition, a new code for Reclast will be effective July 1, CMS said. Only the 5 mg/100 ml bottle should be billed under the new code, Q4095.

Earlier this year, CMS issued a revised policy that denies coverage for compounded inhalation solutions on the basis that they are medically unnecessary. That policy change also takes effect July 1.

For more information, click here for a Medlearn Matters article: http://www.cms.hhs.gov/MLNMattersArticles/downloads/MM5645.pdf

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