ROHO In The Know : A Government Perspective

Author Bio:

J. David McCausland
Senior Vice President of Planning and Government Affairs – The ROHO Group

Background: From 1984 – 1991, employed by a national DME provider in several management roles associated with reimbursement, standards, sales and operations. Since 1991, employed by ROHO, Inc., a leading manufacturer of seating, positioning and full support surface products. Currently in charge of strategic planning, government, regulatory and legal affairs. Read More >>

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CMS’ Form C Limitations Make Access to Quality Goods

The publicized mantra for Medicare Part B’s competitive bidding program has been to reduce expenditures while maintaining quality and ensuring beneficiary access to the goods and services that they need. One of the frequently raised questions regarding this is:

How will CMS ensure that beneficiaries will have access to the goods they need; and, how will CMS ensure that the goods provided are of equivalent quality to what beneficiaries from outside of the competitive bidding areas, or covered by other payers, are receiving?

As a means to address these concerns CMS created a “Form C Quarterly Report” through which winning bidders must report the manufacturer, make and model of goods provided to beneficiaries in the bid areas. CMS’ contractor, the CBIC (Competitive Bidding Implementation Carrier), has a considerable amount of information on its website regarding Form C. On the CBIC website it states that the “Form C Quarterly Report” is to “provide CMS with information to monitor the program to ensure beneficiaries have access to and are receiving quality items.” Further, instructions included on the CBIC site stress that bid winners are “responsible for providing the model, manufacturer and model number for the top 80 percent Healthcare Common Procedure Coding System (HCPCS) codes in the product category.”

The CBIC website provides a tool to identify the codes which must be reported by the Competitive Bid Area (CBA) and competitive bidding product category: (http://www.dmecompetitivebid.com/palmetto/cbic.nsf/FormC?OpenForm).

When using this tool for the competitive bidding product category of “standard power wheelchairs and accessories” it indicates that winning bidders must provide manufacturer, make and model information for three HCPCS codes, K0822, K0823 and K0825.

However, the competitive bidding product category for standard power wheelchairs and accessories contains 106 HCPCS codes! These three codes only represent 2.8% of the total codes in the product category. How does this correlate with the requirement that the bid winners must report for the top 80% of codes within the category? The only explanation that appears to resolve this apparent conflict is that these three codes represent over 80% of the total expenditure within the category.

This really seems to reinforce, rather than address, the initial concern. Consider the following:

• If only three codes represent so much of the total expenditure then why is it necessary, or even appropriate, to include the other 103 codes in competitive bidding?
• Even if all the other items in the standard power wheelchair product category represent a small portion of the total expenditure, it is still critically important the beneficiaries have access to the goods they need and that the products they are provided are of an acceptable quality.
• This product category contains:
  • Products intended to protect the beneficiary’s skin from breakdown.
  • Products designed to address the positioning and stability needs of the beneficiary.
  • A myriad of products that may need to be make and model specific in order to fit on the specific power wheelchair.

How will Form C ensure that beneficiaries have access to quality products in these critical areas?

Does this illustrate the need for competitive bidding rules to be modified to focus only on those items that have the greatest expenditures and the greatest opportunity for savings? Why should beneficiaries’ access to the quality goods that they need be placed at risk, especially when the potential opportunity for savings is very small?

Dave

Will Paul Revere Show Up In Time?

Years ago I started my professional career as a history teacher. This passion for history certainly has a significant impact on how I view things. I’m experiencing one of those moments right now regarding competitive bidding… and my mind is being drawn to Paul Revere and the beginning of the Revolutionary War.

In early 1775 everyone knew that hostilities was not an “if” statement, it was a “when” statement. In order to be prepared and to respond quickly and effectively a large network was created to keep watch on the movements of the British military. We all know how the story goes from there… on April 18^th, 1775 Paul Revere, and the lesser know William Dawes, were informed that attack was eminent and the ride announcing that “the British are coming” became a famous part of American history and folklore.

I see a lot of similarities between December of 2010 and April of 1775. We all know that competitive bidding is eminent, we even know when it’s going to start, and we all believe that it’s going to produce casualties. What we don’t know is when and where the first casualties will occur and how we’ll spread the news to rally our forces.

What would have happened if Revere and Dawes hadn’t sounded the alarm? Well, in my opinion, it’s quite possible that John Hancock and John Adams would have been captured by the British. Hancock went on to become the President of the Continental Congress and Adams was a powerful, influential member. Both were among the most ardent supporter of us declaring independence from England and Adams was a member of the committee that drafted the Declaration of Independence. If these two figures had been captured they would have never assumed those positions within the Continental Congress. Would we have declared independence without them? If we had, would it have come too late? Could the British have already entrenched their military and squelched resistance? Bottom line, I’d argue that without Paul Revere and William Dawes and their historic ride our history and our country may be quite different today.

OK, so I’ve given everyone a history lesson, what does this have to do with Medicare competitive bidding? Well, the way that I tie these events together is that we are once again faced with an urgent need to keep close watch on what is going on and we must be ready, willing and able to sound the alarm on a moment’s notice.

Many of us have argued loud and long that competitive bidding is going to have a significant, detrimental impact on beneficiary access to quality goods and services. Yet, as sure as we are that this will happen… we don’t have any proof. Our proof will only materialize after competitive bidding goes into effect in the first nine metropolitan areas in January of 2011. Yet, what happens if we aren’t ready, willing and able to find the proof and sound the alarm as quickly as we possibly can? This is my greatest fear! I am very concerned that beneficiaries will be slow to recognize the decline in quality and access produced by competitive bidding. Existing beneficiaries may not need replacement or additional equipment for some time; or, they might be covered under the grandfathering provisions. Either way they won’t notice any changes for some time. New beneficiaries that have never obtained DME via Medicare before have no basis for comparison regarding how their access to, and quality of, good and services has been changed by competitive bidding.

Once 2011 starts the clock also starts ticking on the implementation of round 2 of competitive bidding, and this time it will be in 91 metropolitan areas! I really believe that the product categories and codes will be announced in the first half of 2011 and the actual bidding period will close before the end of 2011. Will we get the proof in time to have any effect on any of these events? Will the alarm be sounded from round 1 soon enough to do anything to defend us from round 2?

I believe that our only chance of getting enough evidence in time to make any compelling arguments to influence round 2 will require a concerted effort by all of the provider and manufacturer stakeholders of the DME industry. To get this evidence we will need to do all of the following:

• We’re going to have to educate referral sources on what to watch for and solicit their support to keep us informed on any issues they encounter or concerns they have. This will be the group most capable of identifying problems in the early days of round 1.
• We need to develop a beneficiary “Bill of Rights” defining what they should expect as far as goods, services, response times, etc. We need to educate them on what competitive bidding is “supposed to do”. According to CMS a primary goal of competitive bidding is to reduce beneficiary out of pocket costs while maintaining, if not enhancing, access to quality goods and services. We need to solicit these beneficiaries to keep us informed as well.
• Finally, we need to educate beneficiary advocacy groups and gain their commitment to keep us informed as well.
• We need to pull together as an industry to face this challenge together, rather than only focusing on the needs of one product or geographic sector.

If we do this we will have created a network like our forefathers had back in 1775. All that will be left is for us, the provider and manufacturer stakeholders, to take on the roles of Revere and Dawes and sound the alarm. The American Association for Homecare has already set up methods on their website to report problems: http://www.aahomecare.org and I’m sure that other trade groups will as well. It’s up to us to make sure and get the news to them.

I already told you what I believe could have happened if Revere and Dawes ride had not occurred. I don’t want to imagine what will happen if we fail to sound the alarm on competitive bidding issues.

I’m not sure whether our cry will ever be remembered like “the British are coming” but it is certainly no less important to our industry, our companies, our employees, our clinical partners, and, most importantly, the individuals that depend upon us for the goods and services they need.

Dave



Dirty Politics, the solution to the economic downturn

Hi Everyone!

You know, I think that I’ve figured out the most effective way to stimulate the economy (short of going to war).  All you need to do is schedule a national election and create some initial interest and controversy with sound bites like:

• This election may produce a major shift in power! Or,
• A new, extremist group is gaining momentum that will threaten (or save… depending on your persuasion) our way of life!

Then, add to it a list of candidates that “apparently” include liars, thieves, witches, people that would kick a dog and those that would steal candy from babies.

Combining all of the ingredients appears to create the perfect recipe for a great economic stimulus program.  To support my point, ask yourself what you got in yesterday’s mail, what sort of billboards are in your neighborhood and along your drive, and what commercials you have seen or heard over the last several weeks.  Here’s what it has been like for me:

• My mail has been littered with political flyers for (or most often against) a particular candidate or election referendum.  Yesterday I got twelve pieces of mail and ten were from political candidates or interest groups.
• I can’t count the number of signs in my neighborhood and along my drive (by the way I’d really like to know what benefit is derived from having twelve signs for the same candidate all lined up in a row spread over a distance of less than twenty yards).
• As for political commercials all I can say is “Thank God for my DVR and my fast forward button!”

Just think of the wonders that this is doing for our economy!  Printers, production companies, actors, television stations, television networks, news programs, radio stations, mail men, post offices, paper mills, photographers, newspapers, garbage men, landfills, video rentals, and private investigators (to name a few) all must be doing a booming business right now digging up dirt, publicizing dirt, delivering dirt or providing an alternative to weary voters desperate to escape the dirt!  Just think of the enormous influx of cash going into our economy?!  Bottom line, I think that we need to postpone next week’s election to insure this stimulation of our economy continues.  We cannot afford for the election season to end!!!

All kidding aside, I must admit that I’m very concerned by the amount of money that has been wasted on this election.  Heck, if the money that has been spent on the election had been applied to the debt we may have actually been able to cover a few of the interest payments to China.  In addition, in watching the campaigns that are going on around the United States I wish there was an option to vote “none of the above, find someone else”.

Sadly, our situation does not appear to be unique to present day.  I’m reminded that the ancient Greek philosopher Diogenes who use to wander about in full daylight with a lantern… searching for an honest man.

What has your experience been during this election season?

Dave

Competitive bidding concerns expressed, are they being heard?

Hi Everyone!

Well, it’s certainly been a while since I was able to sit down with my keyboard and share my errant musings with all of you (sorry I’m trying to expand my vocabulary).  However, something came to light this week that I just had to share.  Since the inception of competitive bidding CMS has used an ongoing mantra to describe the competitive bidding program for DME:

Reduce costs for beneficiaries and the Medicare system while insuring that beneficiaries and continued access to quality goods and services.

Many folks from the industry have argued that this goal is not possible within the framework of the competitive program that CMS has designed.  Unfortunately, since these comments were coming from the industry they have been discounted as being self-serving.  However, this week 167 experts signed on to a letter (including multiple Nobel prize winners) expressing significant concerns regarding the design of the DME competitive bidding program and forecasting an outcome that is far from CMS’ stated goal.  In the letter these identified four main areas of concern:

1. Bids submitted under Medicare’s competitive bidding program are not binding commitments.  “This undermines the credibility of the bids, and encourages low-ball bids in which the supplier acquires at no cost the option to sign a supply contract” (or refuse to sign a contract).

1. Using the median winning bid as the winning bid rate.  This results in 50% of the winners being offered a contract below what they bid.  In addition, it encourages low-ball bides, since a low bid guarantees winning but the bid has a negligible effect on the winning bid rate.

1. The use of “composite bids” to select winners “provides strong incentives to distort bids… bidders bid low on products where the government overestimated demand and high on products where the government underestimated demand.”

1. The Medicare competitive bidding program lacks transparency.  “Both quality standards and performance obligations are unclear.  This lack of transparency is unacceptable in a government auction and is in sharp contrast to well-run government actions such as the Federal Communications Commission spectrum auctions.”

They summarized their concerns as follows:  “This collection of problems suggests that the program over time may degenerate into a ‘race to the bottom’ in which suppliers become increasingly unreliable, product and service quality deteriorates, and supply shortages become common.  Contract enforcement would become increasingly difficult and fraud and abuse would grow.”

These experts do see auctions and competitive bidding as a viable option for DME… but not under the existing design.

Hopefully the concerns expressed by these experts will not be ignored and we can still bring some common sense to this program before round one is implemented (currently schedule to go into effect on January 1, 2011).  If you believe that the DME competitive bidding program needs to be fixed (or scrapped) now is the time for you to share this belief with your elected officials.  In about a month every seat in the U.S. House of Representatives is up for grabs along with one-third of the Senate.  The month of October will see all of the members of Congress will be back in their respective states / districts, along with their opponents, trying to convince you to vote for them.  There is no better time to get them to hear your opinions.

I’ve attached a copy of the expert’s letter and the following is a link to an article from the N.Y. Times:

Fix Medicare’s Bizarre Auction Program

Auction Experts Letter to Stark 10-09-26

All the best and please let me know what you think!

Dave

We Need Your Help!

For quite some time we’ve been trying to get adjustable skin protection seating pulled out of competitive bidding.  Whether you support or oppose competitive bidding I think that everyone would agree that in order to effectively bid anything requires the items your are bidding on to be well defined.  This simply isn’t the case for adjustable skin protection seat cushions.  Currently all products that are classified as adjustable skin protection cushions are assigned to one of four codes:

* Adjustable skin protection cushion < 22 inches wide

* Adjustable skin protection cushion, 22 inches wide or greater

* Adjustable skin protection and positioning cushion < 22 inches wide

* Adjustable skin protection and positioning cushion, 22 inches wide or greater

There are over 4000 products of various shapes, sizes, materials, durability, features and functions assigned to one of these four codes.  Bottom line these codes are not distinct enough to effectively bid.  Any formula that combines under-defined codes with a bidding structure that selects winners strictly on who submits the lowest price will undoubtedly lead to providers submitting bids based on the products that cost them the least to obtain.  This will reduce, if not eliminate, beneficiaries’ access to the specific products and services they need.

To date we haven’t succeeded in our effort but we have been making progress.  More and more beneficiaries, clinicians and organizations have come to support our effort.  For example, the ITEM Coalition, which represents over 50 disabled groups has identified our issue as a top priority.  In addition, we’ve been gaining support in the Congress.  Most recently Congressman Langevin (RI), the only member of the House of Representatives in a wheelchair came out in support of our position.  In addition, at a recent Congressional hearing on competitive bidding, Congressman Shimkus (IL) posed numerous questions regarding the appropriateness of bidding these products.

Attached is a letter that I’ve drafted to be sent to members of the House of Representatives and Senate asking that they send a letter to Secretary Sebelius requesting that adjustable skin protection seating be excluded from round 2 of competitive bidding.  In addition, I’ve attached the letter from Congressman Langevin.

I really believe that we’ve got CMS leaning toward not including adjustable seating in round 2, but there are no guarantees.  We need to continually reinforce the messages that competitively bidding adjustable seating will:

* Negatively impact beneficiary access to the goods and services they need.

* As Congressman Langevin put it:  “…in limiting access to the appropriate adjustable skin protection seat cushion for wheelchair users, Medicare will not save money, but will instead spend more on costly medical care for wounds that could have been prevented.”

If you agree with our issue I’d really appreciate you personalizing the attached letter (Letter to Congress 9-20) and sending it out to your local Representative and / or Senators asking them to send a letter like Congressman Langevin’s (Langevin Letter to Sebelius 9-13-10).

Thanks in advance for your consideration and any assistance you deem appropriate.  Please let me know if you have any questions, need any assistance or get any responses.

Kind regards,

Dave

J. David McCausland
Senior VP of Planning
& Government Affairs

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