CMS decision on Tennessee sets precedent

WASHINGTON - It was a big win in the HME industry's fight against competitive bidding when CMS disqualified one-third of the contract suppliers for Tennessee, but that's not the only state with licensure issues, stakeholders point out.

“It establishes a precedent that CMS is going to have to deal with,” said Andrea Stark, a reimbursement consultant with MiraVista. “I see it as a domino falling, the beginning of a chain reaction.”

CMS last week sent letters to 30 contract suppliers for Tennessee, disqualifying them for not meeting state licensure requirements, such as having a physical presence in the state, by May 2012.

Stakeholders have also brought to light licensure issues in states like Maryland, where they say 100 contract suppliers don't meet state licensure requirements.

“Immediately, I heard from members: 'What about Maryland?'” said Ann Horton, executive director of the Maryland National Capital Homecare Association (MNCHA). “Now, I'm confident if we give Medicare the chance to verify what we've given them, they will correct their mistake and follow their own rules. This has made me believe in the system again.”

Even if CMS agrees to disqualify other contract suppliers in other states, that's not going far enough, stakeholders say.

“Suppliers should demand that CMS recalculate the single payment amounts of all categories impacted by the bid prices of ineligible bidders,” said Ashley Plauche, acting executive director of the Association of Tennessee Home Oxygen and Medical Equipment Services. “These rates are to be exclusively based upon bona-fide bidders, which these unlicensed companies are not.”

If CMS did this, the results would be quite different, stakeholders say.

“I'm sure the rates would be higher,” said Jim Steele, executive director of Better Life Home Medical in Brandywine, Md., and treasurer of MNCHA.

A CMS spokeswoman told HME News that the agency does not plan to recalculate payment amounts—or to offer contracts to additional providers to maintain coverage.

“Given the large number of in-state suppliers in Tennessee, including grandfathered suppliers, we are confident that beneficiaries will continue to have access to a choice of suppliers and a wide variety of quality items and services in the state,” she said.