New OIG Report Raises More Questions About Competitive Bidding

The Office of the Inspector General (OIG) for the Department of Health & Human Services released a report that raises more concerns about the Centers for Medicare & Medicaid Services’ (CMS) ill-conceived competitive bidding program for home medical equipment.

Looking at contract suppliers in Round 2 of the bidding program identified in complaints from the supplier community and congressional inquiries, the OIG focused on 146 unique contract suppliers that may not have been properly licensed in states requiring licensure for companies providing home medical equipment.

In that group, the OIG found that “63 suppliers did not meet licensure requirements for some of the competitions for which they received a contract. Additionally, 14 suppliers need to be further researched by CMS and its contractors to determine if they met or had not met licensure requirements.”

“The fact that it took two years to get this report just solidifies our view that CMS can't evaluate the patient impacts caused by recent deep cuts for rural providers in just six months before plowing ahead with a new round of cuts on July 1,” said Tom Ryan, president & CEO of AAHomecare.  “That’s why we need Congress to step in and make CMS take the time they need to properly evaluate this program.”

“CMS has dragged its feet on implementing provisions passed in Congress last year that would require CMS to better enforce their own rules requiring that bidders are properly licensed in states requiring licensure,” Ryan continued.  “This isn’t the way to run a program that impacts home medical equipment providers nationwide, and the millions of patients that depend on the essential products and care they provide.”

These revelations come as Congress considers legislation requiring CMS to better assess the direct impact of the recent round of price cuts for patients in rural areas before a new round of deep cuts take effect on July 1.  Current Senate and House legislation, known in both chambers as the Patient Access to Durable Medical Equipment Act (S. 2736 and H.R. 5210), would delay the latest cuts for 15 months and require CMS to report their findings on patient access issues on a regular, transparent basis.

“The message is clear,” concluded Ryan. “The bidding program needs serious examination before it causes further disruption for both providers and patients.”

The OIG's summary and full report can be found here.

Vent Policy Revised in Favor of Patients—Thanks to Industry Efforts

As anticipated, the DME MACs collectively released revised coding and coverage requirements for ventilators in the Frequent and Substantial Servicing (FSS) payment category. The new guidance removes the imminent death criteria from the coverage, which is now applicable under the following conditions:

Neuromuscular diseases, thoracic restrictive diseases, and chronic respiratory failure consequent to chronic obstructive pulmonary disease.

The announcement, which can be found here, explains, “Ventilator technology has evolved to the point where it is possible to have a single device capable of operating in numerous modes, from basic continuous positive pressure (CPAP and bi-level PAP) to traditional pressure and volume ventilator modes. This creates the possibility that one piece of equipment may be able to replace numerous and different pieces of equipment. Equipment with multifunction capability creates the possibility of errors in claims submitted for these items.”

The announcement also discusses issues related to upgrades and conditions needed to authorize payment for a second ventilator, which can only occur in cases of medical necessity, and not for spare/back-up equipment.

AAHomecare has been actively working with our members and other stakeholders in the respiratory care sector to pursue relief on ventilator clinical requirements. This revised coding and coverage is a direct result of industry, clinical groups, consumer groups, manufacturers and suppliers engaging CMS and the DME MACs to advocate for needed adjustments to the medical necessity requirements for these essential products.

Future Success Starts with You

A powerful voice in Washington can only come from an informed and active membership base. The American Association for Homecare is proud to represent such a group. In my first three months with AAHomecare, I’ve quickly discovered that the strength, tenacity, and resolve of the people who make up the HME/DME industry is overwhelming – and this does not surprise me in the least. Your response to the trials you face daily to keep your doors open in a volatile regulatory and legislative environment is admirable, if not miraculous. And I’m extremely heartened to say that in an era of what could possibly be one of the most crippling programs providers have ever faced, new companies are joining the American Association for Homecare every week! Despite ominous financial challenges, you understand that membership in your national association is no longer a luxury, but a necessity.

With a 120% increase in new member revenue since 2014, the Association is in a position to continue our fight with a stronger collective voice. AAHomecare is also able to hear more narratives from struggling businesses, collect more data, send more providers to Capitol Hill, and work with you to create a better and more stable business environment for the industry moving forward. Your companies, and the patients you serve, deserve no less.

To that end, positive progress has already been realized with the introduction of S. 2736 – which aims to delay the July 1 cuts in non-competitive bidding areas, which will provide relief for homecare providers and patients in these areas. More is expected on several other policy fronts thanks to the relentless efforts of the AAHomecare government relations team actively working its contacts in Washington, and providers like you staying informed, answering requests to call your Representatives and Senators, and providing information on how competitive bidding is affecting your business and your patients. But there is more you can do to help us accomplish our shared goals.

1. If you are a member not currently serving on an AAHomecare council, I would like to invite you to do so now. We understand people join the Association for many reasons, but one of the most impactful of these is the ability to have a seat at the table, to shape policy—no matter the size of your company! Your opinion can be heard, in very meaningful ways, through council participation. All the while, you will be connecting with thought leaders in the industry, networking, and receiving unmatched access to information on key issues.
   
2. I would also ask that you not be shy about telling your colleagues why becoming a member of the American Association for Homecare is crucial to their business’ success. Share with them peer-to-peer not just the member benefits such as professional development opportunities, member discounts, and access to critical business information and Association staff – but also the direct impact they can have on the future success of our efforts on Capitol Hill.
   
3. Finally, I encourage you to join us May 25-26 at the Washington Legislative Conference, where you will have access to the industry’s top experts, receive education on key issues facing your business, and learn strategies and tactics we are employing to improve the future for the companies serving the homecare market. You will also have the opportunity to speak personally with your Members of Congress through meetings scheduled with AAHomecare assistance. Never underestimate the power of personal conversation on the Hill!

We are proud to represent companies who roll up their sleeves and join the fight to build a better business environment – and I am personally amazed at the resiliency and passion I’ve heard from members and prospective members alike as I’ve become familiar with their stories over the past 90 days. We know there are brighter days ahead. As the foremost national association leading the charge on policy and advocacy for our industry, AAHomecare is best positioned to make your voice heard. So get involved and encourage others to do the same! 

Together we build the future.

Michael Nicol is the senior director of membership services for AAHomecare. He is available to help members become better connected with the Association through AAHomecare’s councils, member programs and benefits, and answer general questions. Michael also accepts recommendations on potential new members. He can be reached at 202-372-0749 or michaeln@aahomecare.org.