CMS Asks for Details about Competitive Bidding Problems

ARLINGTON, Va.--On Friday, the American Association for Homecare held a conference call with officials at CMS and several other national provider associations regarding problems with the agency's competitive bidding system.
According to a statement from the association issued late Saturday, "AAHomecare initiated the call due to the overwhelming concerns expressed by its member companies about technical issues related to submitting bids through the online system and also the issue of the consistency of instructions and information available to providers during the course of the bidding process."
During the call, the association said CMS agreed to review the issues on another call to take place Wednesday, July 25.
To better inform CMS and AAHomecare for that discussion, the association is asking for feedback from first-round bidders who 1) are still having problems submitting a bid or 2) have questions about whether their bids were based on consistent information from CMS. The second point is related to companies "that submitted a bid but after the fact received updated guidance or other information that might have influenced the bid had it been known earlier," the association said.
AAHomecare said Herb Kuhn, acting deputy administrator of CMS, acknowledged the problems with the bid system during the call and cited them as the reason for the extension in the bidding deadline (to July 27) that was announced on Thursday.
"CMS officials said they want to be responsive to providers' bidding problems but need to understand the nature and the magnitude of the problems," the association said. "Therefore, provider feedback is important."
AAHomecare asked that comments be sent directly to the Competitive Bidding Implementation Contractor at cbic.admin@palmettogba.com and also copied to AAHomecare at staceyh@aahomecare.org.

Oxygen Service Study Proposed in House Bill

WASHINGTON--While the Children's Health and Medicare Protection Act (H.R. 3162) passed by the House of Representatives last week contains home oxygen and power wheelchair cuts, it also includes one provision that would be favorable for HME, according to Cara Bachenheimer, vice president, government relations, for Elyria, Ohio-based Invacare.
Bachenheimer pointed out that the CHAMP Act contains a provision for a study to understand the service component that oxygen suppliers provide. The study would be carried out by the Department of Health and Human Services and would be due to Congress 18 months after the law is passed. The study would consider:
--Types of services provided; --Which services are medically necessary or can contribute to better outcomes; and --How much Medicare should be paying for services and medical equipment.
The HHS secretary would also be directed to compare payment rates to competitive bidding rates to show how much Medicare should pay, Bachenheimer said, and also to recommend whether Medicare should pay separately for service.
Results of a study commissioned by the American Association for Homecare in 2006, which was conducted by research firm Morrison Informatics, showed that 72 percent of providers' costs in supplying home oxygen go to services and related expenses while equipment represents only 28 percent.
The service issue in providing home oxygen therapy has long been "nebulous," Bachenheimer said. It is unclear what services are important and what CMS expects. The proposed study would provide critical information for CMS as well as guidance for providers.
"We need to have that study," Bachenheimer said. "We have industry studies and that is great, but the government will never look at those studies and say, 'You are absolutely right.'"
To download a PDF of the Morrison Informatics study, click here.

Industry Rallies against New Threat to Home Oxygen

WASHINGTON--Home oxygen providers braced for another body blow last week when the House of Representatives passed the Children's Health and Medicare Protection Act (H.R. 3162), which includes an 18-month cap for oxygen rental as a means of paying for the $50 billion bill.
In a vote of 225-204, on Wednesday the House approved what is known as the CHAMP Act, which provides medical coverage for uninsured children under the State Children's Health Insurance Program and eliminates most of a 10 percent physicians' reimbursement cut set to take effect in 2008. The bill, which also eliminates the first-month purchase option for power wheelchairs, would be funded through a tax increase for cigarettes and a series of payment cuts to Medicare Advantage plans and health care providers.
The House action preceded by a day the Senate's passage of its version of an SCHIP expansion. That $35 billion package reauthorizes the program--which is set to expire Sept. 30--and would be paid for largely by a cigarette tax increase. The Senate bill does not include the DME cuts.
Representatives from the House and the Senate must hammer out a compromise once Congress returns from its August recess. While President Bush has said he will likely veto the legislation, stakeholders are hopeful the HME industry can put forth enough effort to keep the oxygen and PWC provisions from appearing in the compromise bill before it is sent to his desk.
"We think we have a very good shot at getting oxygen and power wheelchairs out of it," said Cara Bachenheimer, vice president, government relations, for Elyria, Ohio-based Invacare. "And there is a huge question if they can come up with a compromise package the president will sign."
However, Bachenheimer continued, it is "critical" that providers spend August communicating with their legislators about the provisions. "We have a lot of support, but we need people to be educated about these issues," she said.
"I don't think by any stretch of the imagination that the battle is lost here," said Joe Priest, president and COO for AirSep, Buffalo, N.Y. Priest also appealed to providers to contact their federal legislators about the issue. "There is time, but ... you need to voice your concerns through your [representatives] and your senators, and that can make a huge impact."
Although a 13-month oxygen cap surfaced earlier this year in President Bush's 2008 budget proposal, the industry had not expected the oxygen and PWC cuts to be included in the SCHIP legislation. According to Bachenheimer, the provisions weren't in the House bill "until the 11th hour ... but then they said, 'We need some way to pay for this gigantic package, so everyone is going to pay.' Virtually every provider has some cuts in there."
Legislators, bound by law to provide a means to pay for the cost of the expanded children's coverage, focused at first on raising tobacco taxes and initially proposed a 61-cent tax increase on cigarette sales. The Senate version of the bill, in fact, would be funded by that tax. But in the end, House lawmakers declined to raise the tax more than 45 cents a pack--and homed in instead on Medicare reimbursements.
The Congressional Budget Office has estimated that eliminating the PWC first-month purchase option would save $600 million over five years and $900 million over 10 years. Lowering the oxygen rental cap from 36 to 18 months would save $1.8 billion over five years and as much as $6 billion in 10 years.
"If [this oxygen cap] ends up going through," Priest said, "I think the real detriment will be to the patient. This is a huge reduction in reimbursement. For [providers] to continue to provide equipment, they are going to have to drive every nickel of service out of this. You are virtually going to drop off the equipment and go."
That would, Priest predicted, prompt escalating hospital readmissions and trips to the emergency room.
While Bachenheimer said nothing can be certain about the bill's outcome, she noted increasing support for the industry in the halls of Congress and said HME has allies in the Senate who oppose the home care cuts. She pointed to a July 27 letter from Sen. George Voinovich, R-Ohio, to Senate Finance Committee Chairman Max Baucus, D-Mont., in which he wrote of his opposition "to further cuts in the Medicare DME and oxygen benefit."
Bachenheimer also pointed out that new oxygen equipment technology has consistently been exempted from competitive bidding and the 36-month cap as well as the House version of the CHAMP Act. But the industry--everyone in it--needs to step up efforts to educate legislators and CMS about HME, she said.
"People have to take the future of this industry into their own hands," Bachenheimer stated.
"It's practically a textbook example of irony that Congress would cut a break for tobacco while cutting back on home oxygen therapy for the older Americans who depend on it," commented Michael Reinemer, vice president, communications and policy, for the American Association for Homecare.
"Everyone favors health insurance for children. But it's a needless and shameful trade-off to attack oxygen and power wheelchair benefits again to expand health insurance for kids. In the days and weeks ahead," Reinemer continued, "we hope providers will join a state-by-state, district-by-district effort to make sure that these provisions do not make their way into a bill presented to the president."
To view the full text of the House of Representatives' CHAMP bill, click here.

CHAMP Act's Cuts Draw Strong Response; AARP Is Unexpected HME Foe

ATLANTA--News of the so-called CHAMP Act's oxygen and power wheelchair provisions--legislation proposed in the House of Representatives that would reduce the 36-month oxygen rental cap to 18 months and eliminate the first-month purchase option for power wheelchairs--spurred a number of industry stakeholders into action last week.
The Council for Quality Respiratory Care, a coalition of 11 key manufacturers and providers, fired off a letter to House Speaker Nancy Pelosi, D-Calif., and Minority Leader John Boehner, R-Ohio, in hopes of keeping the oxygen provision out of the bill, which is designed to expand the State Children's Health Insurance Program.
"Proposals to cap Medicare payments for vital home oxygen therapy at 18 months would severely impair the provider community's ability to ensure access to quality home oxygen services," CQRC said in the letter. "Of the more than one million frail and vulnerable beneficiaries currently relying on oxygen therapy in their homes, 35 percent will feel the direct, damaging and potentially irreversible effects of such profound cuts in this critical benefit."
The letter also noted the "sweeping changes to the home oxygen benefit" via the Medicare Modernization Act, which mandated competitive bidding, and the Deficit Reduction Act, which mandated the 36-month cap, both of which are in the process of being implemented. New studies show those actions will slice reimbursement by about 19 percent, according to the group, which includes Air Products Healthcare, AirSep, American HomePatient, Apria, DeVilbiss Healthcare, Invacare, Lincare, Pacific Pulmonary Services, Praxair, Respironics and Rotech.
"We are deeply concerned that further changes in Medicare's payment structure or reducing funding for home oxygen at this time would deal a devastating blow to providers and the patients who rely on their care," the CQRC said.
The letter was also signed by the American Association for Homecare and advocacy groups including the Coalition for Pulmonary Fibrosis, COPD Alert-National Patient Support and Advocacy Group and the National Emphysema/COPD Association.
Wayne Knewasser, vice president of public relations and government affairs for Premier HomeCare, Louisville, Ky., and AAHomecare secretary, said when he first became aware of the bill's oxygen and power wheelchair provisions, he put 25 to 30 of his employees on the phones to the offices of legislators to make them aware of the ramifications."
AAHomecare, Waterloo, Iowa-based buying group VGM and the Georgia Association of Medical Equipment Suppliers, to name a few, all sent members a call to action encouraging them to reach their legislators.
But their efforts were tripped up, in part, by the AARP, which has long been considered a friend to Medicare beneficiaries. The mighty organization for seniors championed passage of the House bill and said it will continue to press Congress to make the CHAMP Act a reality.
"The AARP and other groups are talking so positively about this legislation and they are not identifying the group of beneficiaries that use oxygen and power mobility. Why are they not defending these beneficiaries?" asked Knewasser. "You can agree that the SCHIP program is a beneficial program for the health and welfare of the children, but you can also disagree with [how they plan to pay for it]."
Instead of funding the SCHIP expansion completely through an increase in cigarette taxes, House members elected instead to cut reimbursements for DME. "It's just a crazy thing to think that the tax on cigarettes is being held back in exchange for oxygen reimbursement," Knewasser said.
The AARP's stance on the issue needs to be addressed, and now is the time for providers to muster their muscle and make the issues known not only to legislators but to beneficiaries as well, he said. "We need to let the beneficiaries know that these groups are not truly representing everybody," said Knewasser, adding that he has already alerted a Medicare advocacy group for beneficiaries about the issue.
According to one GAMES member, "If we can sufficiently convince [AARP] of the harmful consequences to their members, then they would have to swing into action (or risk advocating for 'Americans of all generations' at the expense of their own members, which would be contrary to their explicit priorities). AARP will be either a strong ally or a strong foe. I think they typically will be one of our strongest allies, unless they misunderstand the issues--as is apparently the case here."
For the full text of the CQRC's letter to Congress, click here.
To read an AARP press release in support of the CHAMP Act, click here.
To contact AARP about the CHAMP Act, call Nora Super, senior legislative rep, at (202) 434-3770.