Healthcare Business News

Probe sought of competitive bidding for durable medical equipment

By Rachel Landen
Posted: June 21, 2013 - 6:00 pm ET

U.S. Reps. Glenn Thompson (R-Pa.) and Bruce Braley (D-Iowa), who previously called on CMS Administrator Marilyn Tavenner to delay the second round of Medicare's Durable Medical Equipment Prosthetics, Orthotics and Supplies (DMEPOS) competitive-bidding program, have now appealed to HHS Inspector General Daniel Levinson to investigate issues related to its implementation.

In a letter to Levinson, Thompson and Braley referenced their earlier request to Tavenner, which included a June 12 letter signed by 227 members of the House of Representatives. In the letter, Thompson and Braley requested that Round Two of DMEPOS, scheduled to take effect July 1, be delayed because of problems in the execution of the program.

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“Medicare's reaction to admitted misconduct in the program has been lackluster. There was improper vetting of suppliers and the public deserves to know that measures will be taken to guarantee program failures will not continue,” Thompson said.

The lawmakers also noted a lack of transparency, the absence of binding bids during the contract process, and violations of state licensure and accreditation requirements affecting bids in all states, but with particular attention paid to Ohio, Maryland, Michigan and Tennessee.

Concerns about the awarding of DMEPOS contracts to bidders in Tennessee that did not hold a valid DME license in the state at the time of their bids had previously been communicated in a letter to Tavenner from that state's congressional delegation.

Two days after Thompson and Braley submitted their letter to the CMS administrator, Tavenner instead responded to Rep. Phil Roe (R-Tenn.), conceding that the CMS had indeed awarded contracts to approximately 30 suppliers (out of 98 total) who did not meet Tennessee licensing requirements. Tavenner told Roe that these contracts would be voided but that “given the large number of in-state suppliers… (CMS is) confident that beneficiaries will continue to have access to a wide variety of quality items and services in the state.”

Tavenner's explanation and solution, however, did not satisfy Thompson and Braley, who explained in their letter to Levinson that “based upon the methodology used by CMS to calculate pricing of items, the 30 suppliers had an impact on setting the single payment amount.” Also, the representatives raised questions as to the CMS' determination of demand in an area, given that they dropped the number of suppliers in Tennessee from 98 to 68.

In the letter to Levinson, dated June 20, the two congressmen asked the inspector general to “investigate these irregularities immediately.” Levinson's office is tasked with identifying and removing waste, fraud and abuse in Medicare and more than 300 other government programs.

Follow Rachel Landen on Twitter: @MHrlanden

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