Editor's Note

House of Cards

Implementing NCB will come a cropper.

• By David Kopf
• Nov 01, 2010

As I watch CMS drive toward implementation of Round One of competitive bidding, I can’t help asking, why? I fully grasp that CMS was required by Congress to create and implement the national competitive bidding program for DMEPOS. And sure, I get the cynical upshot of competitive bidding — I understand that for all of CMS’s perpetual droning about fraud and expense, the program ultimately is a way for CMS to slash through the ranks of HME providers in order tomake its bureaucratic life much easier.

But what I can’t grasp is why CMS is doing all this when it is abundantly clear that the competitive bidding it created is so fl awed that it will have disastrous consequences for the Medicare benefit, and for U.S. healthcare in general. Why can’t anyone at the agency pay heed to the glaring indicators that it needs to go back to the drawingboard. History has been screaming this at CMS:

• In early 2008, before Round One was bid out, two reports from two sets of economists that specialize in bidding and auction models said that the NCB program was fl awed in multiple ways.
• After bidding out Round One that year, it was clear competitive bidding was going to live up to the economists’ and industry’s warnings about negatively impacting care quality and patient access to care. Moreover the high volume of disqualified bidders and race-to-the-bottom bids pointed to serious fl aws in the process. Congress worked with the industry that summer to pass the Medicare Improvements for Patients and Providers Act. The Act told CMS to delay implementation for 18 to 24 months and to repair NCB. The industry had to pay for that delay with the 9.5 percent MIPPA cuts, but it was better than the 26 percent average cut that the “suicide bids” had engendered.
• As soon as it possibly could, CMS charged forward this year with its re-bid of Round One, trumpeting that the program had been revised and revamped to be fair to bidders and with more transparency. As we have seen, that has not been the case. The suicide bidding was even worse, with a 32 percent average cut, and CMS has all but refused to release the names of re-bid winners that have signed three-year contracts.
• While CMS moved forward with the re-bid, Rep. Kendrick Meek’s (D.-Fla.) H.R. 3790 bill that would repeal NCB gained more than 250 co-sponsors. Sadly, it was not passed before the re-bid was closed, which meant it would have to be scored against the new cuts due to a pay-go Congress.
• Now we have a letter from 166 economists and other experts to Congress calling for a delay to Round One’s Jan. 1, 2011 implementation date so that it can be fixed (read more in “News, Trends & Analysis,” page 8). The experts include a Nobel Laureate and the letter’s sobering catalog of problems within the current version of NCB made Congress and the news media take notice.

All this is clearly telling CMS one thing: NCB is not working. So why is CMS pushing it forward? It’s as though CMS is suffering from some kind of bureaucratic, hive-mind hubris that completely blinds it from the ultimate outcome of a seriously flawed bid program: people will get hurt because patients will suffer diminished access to care and reduced quality of care.

Moreover, it has been suggested that CMS’s refusal to announce the winners points to a deeper problem: It doesn’t have enough contractors. If not enough bid winners signed contracts, then a Jan. 1, 2001 implementation simply won’t be feasible. So if that were true, then, again, why wouldn’t CMS delay implementation itself?

Is CMS Administrator Donald Berwick paying attention to any of this? It would seem that as a relatively new leader of the agency he has been handed multiple opportunities to take heed to what history and events have been telling him and delay the program’s implementation. But he hasn’t.

Often, in the industry, we use the rhetorical question “Do people have to die?” to express our frustration with NCB, but I think we’re edging closer to that actually being the only thing that might wake up CMS. I hope it doesn’t come to that.

This article originally appeared in the November 2010 issue of HME Business.