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Medicare is the federal health care system that covers about 36 million people age 65 and older, plus 7 million disabled. It has four parts:
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Home > Medicare Monitor > Archives > 2008 > April > 24 > Entry
Senators seek meeting with Leavitt
Seven Republican senators have called for a meeting with Health and Human Services Secretary Michael O. Leavitt over concerns about how Medicare handled a competitive bid process for 10 categories of medical equipment that has resulted in hundreds of companies being shut out of future business with the program.
“The vast majority of rejected bidders were informed that they had not submitted sufficient financial information, when in many cases, bidders have evidence they had,” the letter continued.
The senators also express concern over reports that some of the selected bidders are headquartered far from the areas where they won contracts and have never served those areas.
Officials from the federal Centers for Medicare and Medicaid Services met with congressional staffers Monday to attempt to explain how the bidding process worked. According to one source familiar with the discussion, congressional staffers expressed a lot of frustration at that meeting with how the bids were handled.
Under a provision in a 2003 Medicare law, CMS held a year-long round of competitive bids in 10 metropolitan areas including one covering Palm Beach, Broward and Miami-Dade counties. Only companies that won the bids will be allowed to deal with Medicare for those items after July 1.
Although the names of the companies have not yet been released, industry officials say only 44 providers of medical oxygen in the three-county area were selected out of 501 providers.
Before the bids were announced, the providers warned that the system would reduce patients’ access to equipment. CMS argued that the bids would significantly reduce fraud that has plagued the industry and would lower cost to beneficiaries.
Since the bids were announced, providers have argued that CMS did not follow the rules it originally established and that the bids were mishandled resulting in hundreds of companies being disqualified for clerical errors caused by the contractor hired to handle the bid process.
Rob Brandt, CEO of City Medical Services in Miami, said his bids for two contracts were rejected by CMS because the contractor, Palmetto GBA of Columbia, S.C., said one document was missing from each of the bids.
But Brandt said his bid was reviewed by a law firm and that 69 other medical equipment providers also say their bids were rejected because the contractor claimed paperwork was missing. Brandt said the contractor may have mishandled hundreds of documents. The contractor referred all inquiries to Medicare.
CMS spokesman Peter Ashkenaz said, “If a supplier believes they submitted all the proper documentation, they should contact CMS’ contractor, who along with CMS has an established process for a case-by-case review of the concerns.”
Brandt said bidders didn’t know that there may have been a problem with their applications because Medicare changed its bidding rules last fall, six weeks after his and other companies submitted their bids. Before the rule change, the companies had been promised that they would be notified if any documents were missing from their bids. But he said the rule was quietly changed weeks later to eliminate the notification requirement.
Ashkenaz said CMS had hoped to use an electronic system for monitoring applications that would have allowed the agency to contact bidders who did not submit all their documents.
But, he said, that did not work.
“So we changed the request for bids … to state that each submitter would need to make sure that each bid was fully complete - just like they must do for all federal contracts. And we told them four different times that they would need to check their submissions. We did update the on-line bid submission system to allow bidders to check the status of their hardcopy bid documents and to be able to confirm the submissions were received.”
The Senate letter was signed by Sens. George Voinovich, R-Ohio, Arlen Specter, R-Pa., Pat Roberts, R-Kan., Richard Burr, R-N.C., Johnny Isakson, R-Ga., John Cornyn, R-Texas, and Jim DeMint, R-S.C.
Comments
By JOE
April 25, 2008 12:22 AM | Link to this
THANK YOU LARRY, FOR REPORTING WHAT IS HAPPENING WITH THE COMPETITIVE BID PROCESS. MORE OF OUR POLITICAL LEADERS AND MEDICARE BENEFICIARIES NEED TO HEAR THIS!! THE NEGATIVE IMPACT TO OUR INDUSTRY AND THE SUBSEQUENT IMPACT TO THE MEDICARE BENEFICIARY IS OVERWHELMING. THIS IS NOT THE ANSWER TO COST REDUCTION OR FRAUD ELIMINATION. WHEN WILL CMS OPEN ITS EYES- THEY HAVE MADE A HUGE MISTAKE AND NEED TO CORRECT IT BEFORE JULY 1 !!
By M. Sori
April 25, 2008 1:42 AM | Link to this
Medicare’s new process of competitive bidding has nothing to do with fraud. The more people, especially Medicare beneficiaries, learn about this process the faster they will realize that the aim of competitive bidding is twofold: 1. to reduce the number of businesses [mostly small] that participate in the Medicare process, and 2. to transfer financial liability to the Medicare beneficiary.
By Rob Brant
April 25, 2008 7:23 AM | Link to this
Larry, Thank you for informing your readers about the reduction in Oxygen Providers in South Florida from 501 to only 44. The Disaster Accountability Project regards this as a significant gap in Disaster Accountability.
The Competitive Bidding Program is based solely on the lowest price. Competition of quality of service and quality equipment will be a choice of the past. Medicare Beneficiaries can visit http://www.AMEPA.us and Download the Miami Fact Sheet in the middle of the page for more information.
Beneficiaries are also urged to call their Member of Congress and US Senators and tell them not to implement the Competitive Bidding Program for Durable Medical Equipment by calling the Capital Hill Switchboard at 202/224/3121
By Gary Cohen
April 25, 2008 9:16 AM | Link to this
As far as cuting costs Medicare has lowered its reimbursement amounts in the past. They could have done that now. They also know who has been committing fraud as they have revoked many provider numbers for that reason. Now they will put THOUSANDS of employers and employees out of work, leave them with no health insurance and leave most beneficiaries with a lack of providers to support them in their time of need. This in par for red tape beauracrocy.
By Ronald Bibace
April 25, 2008 10:48 AM | Link to this
The entire premise on which the Competitive Bidding program is based is a flawed study ordered by CMS, which is inadequate in both scope and time. The flaw lies not with those who completed the study, but with CMS for failing to properly instruct them. Two independent studies correctly based on accepted protocol for making determinations on the longer term effects of the program, have determined that it will be an unmitigated disaster, producing no savings to anyone. Rather costing more to everyone, including beneficiaries, while eliminating most competition and severely reducing quality of services and emergency response capability. CMS has not bothered to examine or report in any way, on the issue of the reduced emergency response capability . Perhaps it will do so after another Katrina type disaster occurs as a direct result of CMS’s ill advised, (however well intentioned) foray into the world of Competitive Bidding. Finally it is worth noting that although CMS’s nominal payments for some services may be higher than private industry’s, the effective payment to the providers after CMS’s mandated requirements are met, is no higher and often lower that that of private industry. This is another example of government beaurocracy gone wild. The attitude from CMS is essentially “Damn the torpedoes, full speed ahead!” CMS has ignored repeated appeals by the SBA (Small Business Administration)and the House Subcommittee on the SBA, and many Congressmen and others, citing hard evidence of the clear illegality of their actions, with what is a very questionable response: “We are just following orders”. A defense which has long since been discredited. What is now required is for the millions of Medicare patients now at risk, to start making their voices heard in Washington. This is an election year, and politicians are generally more likely to listen carefully at such times. Hopefully this impending disaster can be stopped by the voices of reason as expressed by the voters.
By Jim Marco - EMED
April 26, 2008 12:33 PM | Link to this
Medicare said we have been charging too much for medical equipment long enough! Medicare is the one who set the pricing, not the providers. If they got tougher on fraud and reduced the prices everyone could stay in business and god only knows how much it cost to put this flawed program together.
By FRANK BOWERS
May 1, 2008 10:20 AM | Link to this
What I would like tos ee is medicare stop this power wheel companies in their tracks. I look at craiglist and several other papers such as the nickle, and green sheet at all the power chairs sold that are hardly used they cost uppers of 5000. and are being sold by the famlies for as little used at $2 or $300 the chair companies advertise they will get one a chair for little or nothing the companies fail to tell that they are taking large sums from medicare with greed that one would never see in any other way. Frank
By FRANK BOWERS
May 1, 2008 10:21 AM | Link to this
What I would like tos ee is medicare stop this power wheel companies in their tracks. I look at craiglist and several other papers such as the nickle, and green sheet at all the power chairs sold that are hardly used they cost uppers of 5000. and are being sold by the famlies for as little used at $2 or $300 the chair companies advertise they will get one a chair for little or nothing the companies fail to tell that they are taking large sums from medicare with greed that one would never see in any other way. Frank