Wall Street Journal Bashes the Bidding System

Today’s lead editorial in The Wall Street Journal describes the design of the current Medicare bidding program as “idiotic and designed for failure.” The scathing critique praises the concept of competitive bidding but notes that Round One (what it calls the “pilots”) was a disaster. “Medicare cooked up an auction process that defies all economic sense.”

“The current nationwide rollout has no substantive revisions from the failed pilots, despite the objections of 244 economists and auction scientists led by the University of Maryland’s Peter Cramton. The consensus of basically everyone who knows anything about auctions is that the no-risk bids and median pricing are idiotic and designed for failure.”

The link to the text and online comments is here.

CMS Will Abandon Pre-Pay Phase of Power Mobility Demonstration

In response to comments from AAHomecare and other stakeholders, the Centers for Medicare and Medicaid Services (CMS) today announced two key changes to the prior authorization demonstration for power mobility devices (PMD). The key modifications are:

• CMS has removed the prepayment review phase (phase 1) of the demonstration and will go straight to the prior authorization phase.
  
• The PMD provider will be allowed to submit the prior authorization request to CMS on behalf of the physician.
  

CMS expects the PMD prior authorization demonstration to begin on or after June 1, 2012, in the seven states impacted in the demonstration (California, Florida, Illinois, Michigan, New York, North Carolina, and Texas).

Tyler Wilson, AAHomecare president, stated, “We appreciate that after our numerous conversations with CMS, the Agency has responded to many of the concerns expressed by the HME sector. We look forward to working with CMS to ensure that the prior authorization demonstration is implemented in a way that is effective without negatively affecting beneficiaries and HME providers.”

CMS PMD demo page

Summary of the modifications

Text from the announcement follows, excerpted:

Prior Authorization of Power Mobility Devices (PMD) Demonstration

CMS received many comments/suggestions on the Prior Authorization of Power Mobility Devices (PMDs) demonstration. The CMS has considered these comments carefully.

In response to comments received from stakeholders, the CMS has made a number of modifications to the Prior Authorization of PMD demonstrations.

• The CMS has completed a separate Paperwork Reduction Act (PRA) notification for this demonstration and the Recovery Audit Prepayment Review demonstration.
  
• The CMS has removed the 100% Pre-Payment review phase (formerly Phase 1). All modifications that had previously been made to Phase 1, are no longer necessary or applicable as a result of the removal this phase.
  
• The CMS will allow suppliers to perform the administrative function of submitting the prior authorization request on behalf of the physician/ treating practitioner.
  
• This demonstration will begin only after an OMB PRA control number is obtained. The CMS anticipates the start of this demonstration will be on or after June 1, 2012.
  

To submit questions regarding the demonstration contact: PAdemo@cms.hhs.gov

Washington Legislative Conference Comes at a Critical Time – It’s Now or (Maybe) Never

With an urgent need to show force on Capitol Hill, conference fees now free for AAHomecare members, $100 for non-members.

Believing that the homecare community must demonstrate a strong showing on Capitol Hill February 15 and 16, AAHomecare has today offered to pay the full registration fee for all attendees from member companies at the 2012 Washington Legislative Conference. The Association will completely underwrite the registration cost (which covers food, hotel meeting space, and other Conference expenses) for all members thereby eliminating the registration fee – a per-person savings of $245.

In other words, the new registration fee for AAHomecare members is $0 from now through the date of the Conference.

At the same time, the Association will subsidize the costs for non-member companies to attend. Using a contribution from its reserve account, AAHomecare is able to reduce the registration fee by 72 percent bringing it down to $100 per attendee.

All 2012 attendees who already registered will be eligible for a refund for the difference between the amount already paid and the new registration fee. To receive your refund, complete the refund request form.

Note: All refunds will be processed after the completion of the Washington Legislative Conference.

Find complete conference information & registration forms here. Please note: even though registration is now free for AAHomecare members, we still need you to fill out the registration form if you are planning to attend.

“We’re at a critical juncture when it comes to Congress giving full consideration to the Market Pricing Program as a credible alternative to the current bidding program,” stated AAHomecare Chairman Joel Marx, who is Chairman of Medical Service Company in Cleveland. “The homecare community needs to have a strong turnout on Capitol Hill in mid-February. If HME companies fail to make the case, we’re going to have a difficult time stopping the bidding program from moving forward with full force into Round Two.”

In addition to fighting to replace the bidding program, Conference participants will be armed with information and position papers on audits, power mobility, and other key policy areas for the HME sector. The Association staff will schedule your visit with congressional offices and provide talking points and leave-behind materials.

The Wednesday, February 15 schedule will feature remarks by Congressmen Bruce Braley (D-Iowa), Phil Gingrey (R-Ga.), and Glenn Thompson (R-Pa.) and a panel discussion on competitive bidding with University of Maryland economics professor Peter Cramton, Ph.D. and Brett Katzman, Ph.D., professor in the Department of Economics, Finance, and Quantitative Analysis at Kennesaw State University. There will also be time devoted to preparation for the following day's lobbying sessions.

“It’s important for the homecare community to remember that the Washington Legislative Conference is not about AAHomecare,” said Marx. “It’s about voicing the concerns of HME providers and manufacturers on Capitol Hill and getting Congress to help us. The AAHomecare lobbyists who are in Washington full time can only do so much. At least once a year (and ideally more often), everyone who works in homecare must come to Washington and help us push the message of homecare. If people aren’t willing to lend that support and step up to fight for what their businesses need, then homecare is going to have a difficult time competing with all the other health care sectors that are fighting for a shrinking reimbursement pool from Medicare.”

”While we don’t make a profit on the Legislative Conference and are always lucky to break even, we didn’t want registration fees to stand in the way of people coming to Washington D.C. in February,” said Tyler Wilson, AAHomecare president and CEO. “The registration fee covers the cost for the Association to rent hotel meeting space and rooms for Capitol Hill events, as well as for meals, receptions, and related expenses. The registration fee, the sponsorship support and the revenues from exhibitors all go toward covering the cost of the two-day event in Washington. It’s common to underestimate the cost of conducting a Washington event. AAHomecare tries to run the Legislative Conference as economically as possible.”

“The Association decided it was the right time to pull funds from the organization’s reserve account to help subsidize the cost for everyone to attend the Conference," continued Wilson. "We’re glad we’re able to completely underwrite the cost for AAHomecare members and heavily subsidize the registration fee for non-members.”

"This is an opportunity for the HME sector to demonstrate the importance of preserving access to home medical equipment and services. We look forward to big participation in Washington on February 15-16.”

Special thanks to our event sponsors and sector partners (see a complete list of sponsors and exhibitors). Their generous support for the Legislative Conference allows us to hold down registration costs and helps more HME advocates to participate each year.

And special thanks to our newest sponsor, Wright & Filippis, who is hosting the Conference Welcome Reception on February 15.

HMEs: Ask Lawmakers to Enact Market Pricing Program

Congress is in recess until late January but is still working on important issues. While lawmakers are back in their home states, it’s important for HME providers to ask their Representatives and Senators to support the Market Pricing Program (MPP) and convey that support to their respective Republican or Democratic leadership in the House and Senate.

Ask your Representatives and Senators to contact their party’s leadership and ask that the MPP proposal be included in the final “doc fix” bill that is sent to the President. The short “patch” to the doc fix as well as the extension of payroll tax cuts expire at the end of February 2012, so time is short.

A House-Senate conference committee for the doc fix and payroll tax break legislation has been appointed to reconcile differences between the two parties and the two chambers of Congress. Members of this conference committee will be especially influential in what is included or excluded from the doc fix legislation.

While the House and Senate are in recess, please contact your Senators and Representative in their state or district offices to convey your concerns or schedule a meeting during the January congressional recess period.

If you have any questions or feedback from House or Senate staff, please contact Jay Witter at jayw@aahomecare.org.

Talking Points for Senators, Representatives and Staff

Members of Congress need to contact House leadership and House-Senate conference committee members and ask that MPP be included in the final “doc fix” bill that is sent to the President.

The following are key components of MPP:

• The current competitive bidding system has failed and needs to be replaced at the earliest legislative opportunity;
  
• MPP is a sustainable market pricing system for HME;
  
• MPP includes the same HME items as the current bidding program and is implemented across the country in the same time frame;
  
• Two product categories are bid per geographic area. Eight additional product categories in that same area would have prices reduced based on auctions conducted simultaneously in comparable geographic areas;
  
• Bid areas are smaller than metropolitan statistical areas (MSAs) and more homogeneous;
• Bids are binding and cash deposits are required to ensure only serious bidders participate; The bid price is based on the clearing price, not the median price of winners;
  
• The same areas that are exempted under the current bidding program will be exempted in this Act.
  

Background documents regarding the market pricing program listed individually below are also collected on our website.

• Section-by-Section Summary of DMEPOS Market Pricing Program
  
• Market Pricing Program Frequently Asked Questions
  
• Market Pricing Program Chart
  
• Problems with Competitive Bidding
  
• HME Medicare Spending Chart
  
• Round 1 and Round 2 Competitive Bidding MSAs
  

House-Senate Conference Committee Appointed to Negotiate Payroll Tax/SGR

A House-Senate conference committee for the doc fix and payroll tax break legislation has been appointed to reconcile differences between the two parties and the two chambers of Congress. Members of this conference committee will be especially influential in what is included or exclude from the doc fix legislation.

Please ask your Representatives and Senators to contact their party’s leadership and ask that the MPP proposal be included in the final “doc fix” bill that is sent to the President. The short “patch” to the doc fix as well as the extension of payroll tax cut expires at the end of February 2012, so time is short.

The conference committee list includes:

House Republicans
Dave Camp (Mich.)
Fred Upton (Mich.)
Kevin Brady (Texas)
Renee Ellmers (N.C.)
Nan Hayworth (N.Y.)
Tom Reed (N.Y.)
Tom Price (Ga.)
Greg Walden (Ore.)

House Democrats
Chris Van Hollen (Md.)
Sander Levin (Mich.)
Xavier Becerra (Calif.)
Allyson Schwartz (Pa.)
Henry Waxman (Calif.)

Senate Democrats
Max Baucus (Mt.)
Ben Cardin (Md.)
Jack Reed (R.I.)
Bob Casey (Pa.)

Senate Republicans
Jon Kyl (Ariz.)
Sen. Mike Crapo (Idaho)
John Barrasso (Wy.)