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September 10, 2018

Centers for Medicare & Medicaid Services
Department of Health and Human Services
Attention: CMS-1691-P
Mail Stop C4-26-05
7500 Security Boulevard
Baltimore, Maryland  21244-1850

Submitted electronically to:

Re:  CMS-1691-P; Federal Register, Volume 83, No. 139 (July 19, 2018)

The Center for Medicare Advocacy (the Center) provides these comments regarding CMS-1691-P and the impact of the proposed rule on beneficiary access to Durable Medical Equipment Prosthetics, Orthotics and Supplies (DMEPOS).

The Center, founded in 1986, is a national, non-profit law organization that works to ensure fair access to Medicare and quality healthcare. The organization provides education, legal assistance, research and analysis on behalf of older people and people with disabilities, particularly those with long-term conditions. The Center’s policy positions are based on its experience assisting thousands of individuals and their families with Medicare coverage and appeal issues. Additionally, when necessary, the Center provides beneficiaries with individual and class action representation to address broad patterns and practices that inappropriately deny access to Medicare and necessary care. The Center also participated on the Technical Expert Panel convened in February 2018 to discuss issues related to this proposed rule.

The proposed rule seeks to make technical amendments to correct existing regulations related to the Competitive Bid Program (CBP) for certain DMEPOS and proposes to change bidding and pricing methodologies. CMS receives beneficiary, provider and supplier feedback about how current and proposed bidding and pricing policies have, and in the future may, impact them. The Center has experience with beneficiary access problems, hospital discharge planners’ feedback, home and community based advocate information, and suppliers’ struggles to adapt to competitive bid realities and ensuing difficulties meeting patient needs. Changes in bidding and pricing methodologies require careful consideration to avoid unintended consequences that may further hinder beneficiary access to reasonable and necessary DMEPOS.

To summarize, the Center respectfully requests that CMS act as follows:

  • Maximize beneficiary access to equipment and supplies for which they qualify.
  • Create a more beneficiary-friendly process to educate beneficiaries about reasonable and necessary coverage for equipment and supplies.
  • Establish clear policies that clarify responsibilities of suppliers to provide and service ordered equipment and supplies.
  • Communicate requirements that suppliers will deliver, set-up, and train beneficiaries and will provide follow-up necessary to maintain appropriate functioning of items.
  • Reduce unnecessary complicated policies that lead to beneficiary confusion about coverage.
  • Ensure suppliers do not take advantage of complicated policies and beneficiary confusion to inappropriately limit access to reasonable and necessary equipment and services.
  • Develop appropriate enforcement mechanisms to ensure that margin-seeking suppliers are following regulations and policies in order to protect both beneficiaries and the public fisc.
  • Understand that the more complex the delivery system or payment policies, the more layers there will be within which to hide deceptive practices by some suppliers and short-change beneficiaries on the equipment or services they need.
  • Maintain program integrity – in all payment policies refrain from overselling some items while underselling others in a way that will create unchecked adaptive profit-making.
  • Use the sophistication of technology to fine-tune a fair price to be allowed by suppliers for every item from very simple to completely customized DMEPOS.
  • Seek to define “value” by providers and in competitive bid contracts as a multi-faceted concept that is grounded in more than short-term financial results but also includes quality, responsiveness, service, follow-up, long-term results, and long-term cost savings.
  • Communicate that lead item pricing strategies should not create adaptive profit-making and that some beneficiaries will need DMEPOS that will produce a lower margin but that does not mean access should be reduced or denied.
  • Understand that ending contracts for the CBP suppliers on December 31, 2018, will create: system-wide confusion for all beneficiaries; difficulties for beneficiaries to obtain follow-up maintenance, repairs, and supplies; delays and quality control problems; lack of contract enforcement incentives for suppliers; complicated contract re-introduction processes ahead of 2020; and significant opportunities for inefficiencies and challenges to program integrity. The CBP has had its share of growing pains, and it is not perfect, but the whiplash result of stopping the CBP train that’s already halfway up the mountain will be significant in CBP operating areas.

As is the nature of most businesses, DMEPOS suppliers understandably seek to maximize profit-margins. There are less and less not-for-profit, mission oriented suppliers, many striped of their mission work by “survival of the fittest” internet-based giants. Gone are the days when a beneficiary could get every item they needed from one supplier at the pharmacy in town. Even more so in the years that have ensued since the onset of the CBP. Sentimentalism aside, the expansion of sophisticated Darwinian suppliers in the DMEPOS marketplace calls for even stronger protections for the “little guy” – Medicare beneficiaries.

Suppliers need to know that they will be held accountable if they do not follow rules that are clear to both the beneficiaries and the suppliers. Suppliers also need to know that there are specific expectations by CMS and consequences if they fail to follow those rules. With great respect to the fabulous work of the Competitive Acquisition Ombudsman, Tangita Daramola, and her team, who are quick to address individual problems on a case-by-case basis, the systemic increase of suppliers who are less and less interested in the rights of beneficiaries and the Medicare program generally is growing as the number of suppliers decline. CMS should always remember that their number one customer in the Medicare program is the beneficiary and not the supplier or provider.

Lead item pricing can only work if access to equipment and supplies is enhanced, assets of the Medicare trust fund are protected – spent on the appropriate items, and suppliers make a reasonable profit on the average of all items. CMS should be careful to communicate to suppliers the expectation that if they will not profit as much on one item as another, that does not give them free-reign to substitute and short change expected requirements. In order for suppliers to understand those expectations, and know they will be watched for violations, CMS should more closely monitor adaptive profit-making that ignores or evades beneficiary needs in order to increase supplier profits. CMS rule enforcement should be visible and fair. Beneficiaries deserve no less and the Medicare program should be duly respected.

Thank you for the opportunity to comment on the proposed rules and their context in the greater operation of the DMEPOS program.


Kathleen Holt, M.B.A, J.D.
Associate Director/Attorney

For additional information, please contact Kathleen Holt, at at (860)456-7790.

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