Medicare Skirting Own DME Bidding Rules in Tenn.

The Centers for Medicare & Medicaid Services (CMS) have already faced mounting criticism for Round 2 of its Competitive Bidding program, but now it seems that Medicare is not playing by its own rules in Tennessee, according to the American Association for Homecare.

As mandated by Medicare, providers of durable medical equipment (DME) that submitted bids for Round 2 were required to have all licenses and accreditation in place by May 1, 2012.

Now, more than 20% of contract winners in Tennessee alone do not have licenses that will legally allow them to serve patients, reports AAHomecare.


To recover from this violation of the rule, CMS has sent letters to unlicensed and unaccredited contract winners stating that they must have the required documentation in place by July 1, when Round 2 is expected to roll out.

Even with this extension, AAHomecare writes that it may not be enough time for those companies to become legal DME providers to participate in Round 2.

As part of the bidding program’s rules, non-compliant providers will be disqualified, meaning that they will lose every contract in won each bidding area.


“CMS is deliberately allowing these illegitimate companies to produce the low prices that the rest of us are held to in an effort to show false savings for the government,” said Ashley Plauche, director of communications and PR at Lambert’s Health Care.

Also the Vice President of the Association for Tennessee Home Oxygen and Medical Equipment Suppliers, Plauche adds that the manipulative efforts of CMS to break its own rules will shut out “legitimate, local companies.”

“Unlike CMS, Tennessee remains committed to Medicare Beneficiaries, and is more concerned with their safety and wellbeing than with a headline about false savings,” said Plauche.

Tennessee’s Congressional delegation sent a letter to CMS Administrator Marilynn Tavenner on May 20 asking for her plan of action to ensure all Medicare beneficiaries in the state will have timely access to physician ordered supplies and necessary services.

“CMS really should acknowledge the problems, stop the program, and allow time for it to be fixed,” said Tyler Wilson, president of AAHomecare. “It’s not unreasonable to expect a federal agency to abide by its own rules.”

Outrage for Round 2 even reached House Representatives Glenn Thompson (R-Pa.) and Bruce Braley (D-Iowa), who issued a letter to colleagues on May 17 asking them to join in sending a letter to Administrator Tavenner.

Thompson’s and Braley’s letter states their concern for “lack of transparency” in the bidding process as well as an “improper vetting” of bidders.

A solution to Medicare’s bidding program has been H.R. 1717, a bill introduced by House Representatives Tom Price (R-Ga.) and John Larson (D-Conn.) The bill would do away with Round 2 and put a market pricing program in its place.

Since its introduction on April 25, the bill has been gaining mounting support, now standing with 96 cosponsors.

Written by Jason Oliva