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by: Mike Moran - Wednesday, July 2, 2008

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National competitive bidding is a train that has left the station, but it may be headed for an abrupt stop.

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Industry sources say the Senate, when it returns to Capitol Hill early next week, plans to pick up a Medicare bill that would delay competitive bidding and prevent a 10.6% cut to physician reimbursement. The Senate failed, by a slim margin, to move the same bill forward on June 26.

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As a result, competitive bidding kicked off yesterday. CMS, however, delayed the physician cut, also scheduled to go into effect July 1, until at least July 15, to give the Senate more time to act.

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“Lawmakers are hearing strong concerns from constituents, physicians and providers in their home districts this week,” said Walt Gorski, vice president of government affairs for AAHomecare. “When they return, we believe they will be more inclined to vote for this bill.”

The bill, like a bill that passed resoundingly in the House of Representatives on June 24, would delay competitive bidding for 18 to 24 months in exchange for a 9.5% nationwide reimbursement cut for all products included in Round 1. It contains no additional cuts to home oxygen therapy or power wheelchairs.

The Senate needs at least 60 votes to end debate on the bill and move it forward. With 67 or more votes, the Senate may able to protect the bill from a possible presidential veto, sources say. The president has indicated he may veto the bill because it replaces cuts to physicians with cuts to Medicare Advantage.

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by: Mike Moran - Thursday, June 26, 2008

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An opinion piece written by AAHomecare President Tyler Wilson titled "Opposing View: Fix the bidding program" appeared on USA Today's Web site this morning. The piece argues that a bill passed in the House of Representatives to delay and improve national competitive bidding would "save billions and preserve quality."

Wilson's piece responds to an opinion piece written by USA Today titled "Our view on health care: Suppliers defend sweet deal" that also appeared on the Web site this morning. It states competitive bidding is a "good deal" for taxpayers.

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The New York Times published a similar column yesterday that admonished Congress for trying to delay the program (See blog below).

Old Yeller movie download Click here to read Wilson's piece. Click here to read USA Today's piece.

by: Mike Moran - Wednesday, June 25, 2008

The New York Times published a column today, "High Medicare Costs, Courtesy of Congress," that admonishes Congress for trying to delay national competitive bidding. The author, David Leonhardt, sends more than a few zingers the HME industry's way. Here are a few:

*For years, Congress has set the price for walkers and various medical equipment, and it has consistently set them well above the market rate, effectively handing out a few hundred million dollars of corporate welfare every year to the equipment makers.

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*So what about the equipment makers’ various complaints? On close inspection, they’re pretty flimsy. My favorite is the notion that the new rule will force some companies to go out of business — which, indeed, it may. That’s sort of the point. After all, should taxpayers really be propping up any equipment makers whose survival depends on artificially inflated prices?

Click here

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to read the column.

While the industry has made significant progress convincing Congress that competitive bidding's a program gone bad, it still has a lot of work to do to convince some members and the public, as a whole, that they're a value, not an expense, to the healthcare system.

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by: Mike Moran - Tuesday, June 24, 2008

The House of Representatives easily passed a Medicare package today 355 to 59 that delays national competitive bidding for 18 to 24 months.

T.A.C.T.I.C.A.L. film As expected, to pay for the lost savings from delaying the program, H.R. 6331 proposes, starting in 2009, a 9.5% payment cut nationwide for all product categories included in Round 1. In comparison, as part of competitive bidding, CMS plans to slash prices for the products, on average, by 26%.

Additionally, H.R. 6331 does NOT include provisions to cut home oxygen therapy and eliminate the first-month purchase option for power wheelchairs.

But the industry's only half way to delaying competitive bidding and avoiding additional cuts.

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The Senate is still crafting its Medicare package. While Senate leaders have indicated they will include a provision to delay competitive bidding, they haven't been as forthcoming on whether they'll use cuts to oxygen and power wheelchairs to offset cuts to physician reimbursement slated for July 1.

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for a summary of H.R. 6331 and instructions on how to contact your senators.

by: Mike Moran - Wednesday, June 18, 2008

The Rules of Attraction rip Sens. Max Baucus, D-Mont., and Chuck Grassley, R-Iowa, haven't been able to agree on a Medicare package, but they joined forces yesterday to introduce a bill that would delay national competitive bidding and force CMS to improve the program. S. 3144 mirrors H.R. 6252, a bill introduced last week by Reps. Pete Stark, D-Calif., and Dave Camp, R-Mich.

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"A year ago, none of us would have thought this was going to happen," one provider told me today. "The push we have is incredible."

French Kiss movie download With competitive bidding's July 1 start date approaching, industry stakeholders were encouraging providers and others to call their senators and representatives to co-sign the bills. Both bills have more than 20 co-sponsors.

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For more information, including bill summaries and lists of co-sponsors, visit AAHomecare's Web site: www.aahomecare.org.

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by: Mike Moran - Wednesday, June 11, 2008

AAHomecare has raised the stakes in its bid to halt national competitive bidding. On June 9, the association filed a federal lawsuit against Department of Health and Human Services Secretary Michael Leavitt and CMS Acting Administrator Kerry Weems. AAHomecare claims their implementation of the program has resulted in numerous violations of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA), the Small Business Act and the Administrative Procedures Act. Specifically, the association claims:

*The secretary did not specify in either the proposed or final rule the applicable financial standards, resulting in providers being unfairly excluded from the program.
*CMS redefined what it meant to be a small provider (from $6.5 million to $3.5 million in total annual revenues) without any explanation.

AAHomecare CEO Tyler Wilson stated in a release: "While we continue a full-court press on the legislative front to delay the bidding program, we also want to get the courts involved in reviewing this troubled program. This flawed bidding program has not only been mishandled by CMS but both CMS and HHS have violated the underlying statute in developing and implementing the program. The bidding program will put thousands of homecare providers out of business, and patients' access to quality home medical equipment and services will suffer as a result."

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Click here

to read AAHomecare's announcement of the lawsuit.

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by: Mike Moran - Wednesday, June 4, 2008

Congress is back in session after its Memorial Day/district work recess, and according to preliminary reports from industry sources, legislators can't afford to waste any time before introducing a Medicare package. One industry source says that Sen. Max Baucus, D-Mont., chairman of the Finance Committee, plans to introduce a Senate version of the package as early as next week. That means the industry's lobbying non-stop this week to get the following included in the package:

*a delay of Round 1 of national competitive bidding, which kicks off July 1. Earlier this week, the industry was able to get one-third of the House of Representatives (132 members) to sign a letter to the House Ways and Means Committee leadership demanding at least a one-year delay.
*a carve out for complex rehab

The industry's also lobbying to keep the following excluded from the package:

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From Hell hd *a reimbursement cut for home oxygen therapy (One industry source says legislators are contemplating a single-digit not a double-digit cut).
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*the elimination of the first-month purchase option for power wheelchairs.

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Legislators hope to have a Medicare package introduced before July 1 to prevent a 10% cut to physician reimbursement from going into effect.

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Undoubtedly, there are other special interest groups trying to get provisions included/excluded in the package, but it's hard to image there's another group other than the home medical equipment industry with more at stake.

It should be an interesting two to three weeks.

by: Mike Moran - Wednesday, May 28, 2008

Boy, did we underestimate the maze that is competitive bidding. By that, I mean little did we know last week just how difficult it would be to ferret out how many contracts national HME providers—Lincare, Apria, American HomePatient (AHP) and Rotech—accepted as part of national competitive bidding.

By tallying the total number of contracts accepted by the nationals using CMS’s lists (Lincare 12; Apria 14; AHP 37, if you count American HomePatient Inc. & Subs; and Rotech 11), we didn’t exactly get the full picture. Because some nationals likely bid using different names—the name of a company they acquired last year, for instance—they probably accepted more contracts than that.

Here’s how Rotech CFO Steven Alsene put it: “The winning suppliers were listed by legal entity name not by corporate name.” As such, Rotech accepted a total of 44 contracts, he said, not 11.

Lisa Getson, Apria’s executive vice president of business development and clinical services, confirmed that the provider accepted 14 contracts (though it was offered more than that). “Unlike our competitors, with rare exception, all Apria locations go by the name of Apria,” she said.

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Lincare officials declined to comment. Attempts to reach AHP officials were unsuccessful.

Conceivably, the nationals could have accepted a total of 364 contracts if they submitted and won bids in every product category in every MSA. That’s 91 (nine product categories in nine MSAs plus 10 categories in one MSA) times four (the number of nationals).

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At the very least, then, the nationals accepted 107 (12+14+37+44) out of 364 or 29% of possible contracts.

Heaven Can Wait film Flight from Ashiya divx We do know that CMS offered 64% of its contracts to small providers, those with revenues of $3.5 million or less. But we don’t know how many of those contracts were accepted. We’ve asked CMS to tell us how many total contracts were accepted and how many of those contracts were accepted by small providers.

If we know what percentage of contracts was accepted by small providers, we’ll know, by deduction, the percentage won by nationals and larger independent providers.

Stay tuned.

by: Mike Moran - Wednesday, May 21, 2008
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As industry stakeholders make another go today at lobbying lawmakers to delay or repeal national competitive bidding as part of AAHomecare's fly-in, here's a friendly reminder from industry consultant Vince Crew:

"Everyone is so consumed with competitive bidding, but I'm telling people they need to refocus on the business of doing business," he said. "Yes, they have this wrinkle called competitive bidding, but are they keeping their employees energized? Are they thinking about their product mix?"

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The likely response from providers (and Crew has heard this a lot): "But if we don't deal with competitive bidding, we're not going to be in business."

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No one's saying providers should ignore competitive bidding or the corresponding industry lobbying efforts. But they can't fight for the industry at the expense of their businesses.

"Wouldn't it be nice," Crew asked, "if running their businesses could distract providers from competitive bidding?"

by: Mike Moran - Wednesday, May 7, 2008

It's only Wednesday, but it's already been a busy week for the HME industry.

*The DME MACs on Monday published a FAQ on CMS's ATS requirement. The roll out of this requirement on April 1, 2008, was supposed to be uneventful, but thanks to shifting market dynamics and a last-minute decision by the powers-at-be to change the rules of the game (by allowing contract ATSs), providers have had more problems with the requirement than they expected. See story in our June issue.

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*Also on Monday, providers in Ohio testified before Medicaid officials about a proposed reimbursement reduction for oxygen concentrators. On March 24, three days after CMS released competitive bidding reimbursement, Ohio Medicaid proposed paying providers about $105 per month for oxygen concentrators, about 80% of $130, the reimbursement set for Cincinnati, one of the Round 1 areas. Providers are lobbying legislators not to give the rule their necessary stamp of approval.

*On Tuesday, oxygen concentrator reimbursement

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and competitive bidding were the focus of articles in two well-respected newspapers, The Washington Post and The Wall Street Journal.

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*Also on Tuesday, Rep. Pete Stark, D-Calif., chair of the Ways and Means Committee's health subcommittee, held a hearing on competitive bidding. The members of the subcommittee gave Kerry Weems, CMS's acting administrator, a good grilling, but this is what's generating the most buzz: When Stark asked AAHomecare's Tom Ryan whether the industry would accept reimbursement cuts totaling $6 billion over five years to get rid of the program, Ryan said, Yes.

Coming up: At the hearing, Weems said CMS expects to announce next week the winning bidders who accepted contracts for Round 1.

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