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NHIA to CMS: Reopen Formal Rule Making Process on Competitive Bidding

Other Specific Recommendations Submitted

(April 9, 2009)

NHIA President Russ Bodoff has written Acting Centers for Medicare & Medicaid Services (CMS) Administrator Charlene Firzzera that NHIA believes that a formal rule-making process is and remains the best vehicle for CMS to address the important issues that challenged the Medicare Competitive Bidding program before its aborted July 2008 roll out. Rather than full rule-making, CMS issued an Interim Final Rule to restart the program in 2009.

“CMS must give key leaders and stakeholders a meaningful opportunity to provide input that will help create a more effective and practical competitive bidding system,” per Bodoff. He added that “health care providers and patient organizations can work with CMS to improve understanding of the practical and logistical components of patient care so that the competitive bidding program can address several issues that arose during the initial implementation.”

Bodoff’s statements were part of NHIA’s comments on CMS’s Interim Final Rule, which included three specific recommendations to improve the program:

1. Extend the grandfathering option to additional products into the competitive bidding program to encompass enteral therapy patients.
2. Require a minimum level of supplier experience with a product category or require that a supplier without previous experience with a product category provide a detailed plan for compliance with applicable standards.
3. Conduct a detailed evaluation of the program between Round One and Round Two.

Before Congress halted the program in July of 2008, NHIA noted that the first Round One implementation became highly problematic for many enteral patients because a number of the winning enteral suppliers had little or no previous experience providing enteral nutrition. This problem was heightened by the strained and difficult communications when beneficiaries attempted to contact those suppliers to begin service. NHIA believes that some enteral patients never did connect with winning enteral suppliers and that if CMS had offered a grandfathering option, many of these issues likely could have been avoided. Grandfathering would provide somewhat of a safety net for Medicare beneficiaries who would otherwise have to find new suppliers during a confusing transition period.

During the first attempt at implementing competitive bidding, CMS awarded numerous contracts to suppliers that had very little or no expertise with the product category they bid on or were inexperienced in the geographic area that they bid for. NHIA believes that the best course is for CMS to require a minimum level of experience with the product category a supplier wishes to serve as a prerequisite to CMS’s accepting a supplier’s bid.

Noting that the Government Accountability Office has warned that wide-scale implementation of competitive bidding may have unforeseen problems, NHIA calls for a thorough evaluation between Rounds One and Two to assess the competitive bidding program’s impact on quality, access, and product selection.

• NHIA Members: Read NHIA’s complete comments.