HCFA's competitive bidding train keeps rolling on down the tracks
Polk County, FL, chosen as first demonstration project site
The Health Care Financing Administration (HCFA) may be behind schedule in implementing its competitive bidding demonstration project, but the agency has no intention of letting it fall by the wayside. When Polk County, FL, recently was named as the first location for the demonstration project, the message was loud and clear to the industry that competitive bidding is well on its way.
The project in Polk County will affect home infusion providers because these are the services included in the project: enteral nutrition products and supplies, oxygen supplies and equipment, surgical dressings, urological supplies, and hospital beds and accessories.
HCFA claims that competitive bidding will improve quality of care, reduce costs, and help eliminate fraud. But the industry isn't buying the hype just yet.
"There are a lot of concerns because HCFA is not telling us about the competitive bidding demonstration project, and they probably won't until the RFP [request for proposal] is issued, which may not be until September or October," says Steve Haracznak vice president of communications for the National Association of Medical Equipment Services in Alexandria, VA.
One of the main concerns is that it appears most providers will be locked out of the program following the initial bidding process.
"From what we're hearing about how it may be, if you submit a bid and your bid is not the low bid, you are precluded from participating in the program," says Haracznak. "If someone bids $200 for oxygen concentrators and you come in at $220 but HCFA accepts the bid at $200, you can't say, 'We'll participate at $200.' They won't allow that."
The other concern centers on continuity of care for beneficiaries.
"HCFA is bidding out five different projects for competitive bidding, and there is a possibility that five different providers may win," say Haracznak. "If the beneficiary has received all their equipment from ABC Home Care, they may now receive one thing from ABC Home Care, other equipment from DZ Home Care, and yet other equipment from Able Home Care. They may deal with five different providers."
Keep in mind that some providers, regardless of quality of care, may opt not to participate in the bidding project if it doesn't appear cost-effective. And if you don't bid - and win - at this time, it appears you will be precluded from providing equipment to any beneficiary.
Alan Parver JD, president of the National Alliance for Infusion Therapy in Washington, DC, notes that the government appears to have given competitive bidding a priority.
"HCFA is delaying a lot of initiatives because of the Y2K problem, but they said they are not delaying this," notes Parver. "Also, the deputy HCFA administrator appeared at the session in Florida on June 10 talking to suppliers and explaining the program. The fact that such a high-ranking HCFA official would appear at the session indicates that HCFA is taking this demonstration project very seriously."
Standards have not been finalized
Parver joins Haracznak in his apprehension regarding competitive bidding.
"One of my concerns is the relatively weak standard that appeared in the last draft of the standards for the project," says Parver. "They have not finalized the standards and the criteria they have to meet or what functions they will be held to."
Parver notes that the danger lies in how the standards define various therapies.
"If a therapy is defined so that it becomes nothing more than the delivery of items such as supplies and equipment and that is what bidding would be based on, then suppliers that have invested heavily in becoming accredited by the Joint Commission and that maintain adherence with those standards are going to be at a very clear disadvantage compared to those who have not made that investment," he says.
Then there are general areas of concern regarding the well-being of beneficiaries.
"I'm concerned about competitive bidding in the health care context because there are a number of very important issues that policy-makers could presume away," he says. "They could presume that the minimum acceptable level of quality will be met, that there will not be a disruption in patient care, and that patient interests and desires will be protected when there might be a change in the provider."
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