February 7, 2011 
                           Medicaid Competitive Procurement Update

Austin, Texas ------ The Comptroller of Public Accounts concluded its public forums in December 2010
meeting with stakeholders, manufacturers and advocacy groups to discuss Competitive Procurement
for incontinent supplies.

During the series of  five (5) meetings, held in Austin, Texas, participants from various advocacy groups and 
DME Suppliers voiced their concerns regarding Competitive Procurement and the effect is would have on
the Medicaid Beneficiaries the Access to Care.

The focus of these meetings was to provide input to the Health and Human Services Commission (HHSC)
and the Comptrollers Office about the savings which they perceived by implementing Competitive Procurement.
DME providers were quick to point out the problems associated with limiting the number of providers
and the results of limited Access to Care.

The message was clear from the start. The Comptroller was interested in reducing the number of
DME providers to limit their administrative costs and to lower the state's cost of supplies provided
to the Medicaid beneficiary. They would not give a number when asked about the reduction.

The Comptroller's representative would not provide any time lines for implementation, however
their web site noted a 2011 timeline. That timeline has since been removed from the comptrollers
competitive procurement web site.

At the second hearing, Barry Johnson, President of the Texas Alliance for Home Care Services (TAHCS),
provided an overview of the flawed Medicare Competitive Bidding program. "We do not want to
experience the same flaws as the Medicare program and it would be in the best interests of taxpayers
for the Comptroller's office to review the flaws prior to implementing any competitive bidding program
in Texas," said Johnson. 

Currently the Comptroller's office has projected the savings with competitive procurement to be
15.2 Million. They were told by manufacturers there is a need for more specific HCPCS codes 
to adequately meet the beneficiaries needs.  These additional codes would be priced accordingly and
could cause a cost increase versus a decrease in the incontinent supplies thus erasing any savings.
 
For example, Bariatric and youth briefs currently reimburse at the same fee schedule.
Due to the provider's cost for Bariatric diapers, an increase would be necessary under a Competitive
Procurement program. And, recommendations were  made for independent testing
to rate the quality of each incontinent product. This testing would increase the administrative 
cost for implementing the program.

It was recommended the Comptroller's office take the issue of Competitive Procurement
to local comunities for public input since many Special Needs beneficiaries were not physically able
to attend the meetings in Austin. The Comptroller's office was contacted in January 2011, but
could not provide any information when they would schedule community meetings outside Austin.

                                                                                 ###