Industry Advocacy

Focusing on the Path Ahead

Concentrating on past setbacks gets the industry nowhere fast.

• By Wayne Stanfield
• Feb 01, 2013

Since 2003, the DME industry has fought to end the competitive bidding program. Whether we have done a good job in this fight is debatable. History shows that the industry did very little exceptwait from 2003 to 2007.

Beginning in 2007, the industry realized that the Medicare Modernization Act of 2003 had set in motion a bureaucratic debacle that would destroy the DME industry as we know it. The Centers for Medicare and Medicaid Services was given the leeway to write the rules for competitive bidding and oxygen reimbursement without anyone having the right to challenge how it was done. Moreover, our right to administrative andjudicial review had been taken away, as well.

From 2009 to date we have fought very hard against tremendous odds and a formidable opponent to repeal CMS’s DME bidding, first with H.R. 3790, then H.R. 1041, and then H.R. 6490. We convinced hundreds of lawmakers in the 111th and 112th Congresses to support repeal, thoughmany questioned what would replace it.

A Shift in Strategy

Then, in 2010, in rides the proverbial “white knight” in the form of University of Economics Professor Peter Cramton, Ph.D. Cramton used his expertise and that of his Economics colleagues who specialized in auction theory to argue that not only is CMS’s bidding program all wrong, but that it will ultimately fail to accomplish the goals set by Congress. He and his fellow economists have built a substantial case against the program, not at the industry’s beckoning, but because they steadfastly believed the CMSprogram was wrong.

Cramton has done more to shine the light on the flaws of competitive bidding for DME than anyone since 2003. He also developed a proposal to repeal and replace it with an auction process that will preserve the vast majority of suppliers while setting fair market prices for DME products and services, and retaining “patient choice” and true market competition (a.k.a. the Market Pricing Program). On top of that, a mock auction was conducted that proved his theory would work, and two university studiesproved that the CMS model will fail.

Some will argue that any program that bids healthcare of any kind is just wrong, but in the face of the crushing weight of the pending Round Two, the industry must look at the much larger picture and consider a few basic facts. DME competitive bidding is now a part of the baseline federal budget, and in this so-called “pay-go” environment, repeal will require an offset from somewhere to pay for cost of repeal. The simple bottom line is that a straight repeal of competitive bidding will never, ever happen. Congress needs somethingthat offers at least as much savings before it will replace the bid program.

As we wait to see what our fate will be in Round Two, we know that only Congressional action can stop it. If it doesn't, we are facing a systematic dismantling of the DME industry and CMS get what it wants, a reduction in the supplier community by 90 percent along with an unsustainable feesfor those who initially survive.

The solution is staring us in the face and it is the MPP, It applies proven market principles and auction processes to set fair market prices and will allow the industry to define the services included in these fair market prices. Some in the DME industry oppose the MPP proposal, but since the mock auction on April 1st in Maryland, NAIMES has felt strongly that the auction proposal was the right path to take. And, as I mentioned, the MPP has been endorsed and embraced by industry and consumer groups as wellas the auction experts.

H.R. 6490, which sought to replace competitive bidding with the MPP, came too late in 2012 for the industry to win broad support. However, even in the face of long odds, 94 cosponsors were obtained in a matter of weeks, an astounding achievement. This support was the result of a full court press by every DME trade and support organization in the country. There were dozens of Hill visits, hundreds of phone calls and thousands ofemails sent to Washington pushing our cause.

Our bill may have died with the swearing in of the new Congress, but we must focus on the path ahead. Our champions in Congress still believe that the current program is bad policy and support its replacement with the MPP. The industry supports the introduction of a new bidding repeal and replace bill in the 113th Congress. With several potential vehicles to carry the MPP plan into law, we have a chance to take the momentumfrom late 2012 and make a difference, but time is not on our side.

Keep on Keeping On

Getting this done in the current deficit and budget environment will still be a daunting task, especially since the 800-pound gorilla known as CMS is still shoving it forward. We have fought the fight in the grassroots trenches for seven years and it is critical that this fight continue. Industry leaders are working with Congress to have a new budget neutral bill introduced and then we will return to the grassroots battle to gain support forthis alternative plan.

We cannot look back and lament at the past and what could have been. We must look forward. Cramton has recently commented that “we will win this fight,” but it will take time. Our Washington lobbyists and other stakeholders cannot win this war without foot soldiers, suppliers in every Congressional district that “get involved.” Now is the time to shake off the sting and look to the future. Aks yourself: have you done your part tomove things forward?

This article originally appeared in the February 2013 issue of HME Business.