From: Medical News Today

Durable medical equipment and services (DME) providers have advised President Obama to abolish Medicare’s questionable “competitive” bidding for homecare. They argue that this decreases quality and availability of homecare for older people and those with disabilities.

The American Association for Homecare, ALS Association, American Association of People with Disabilities, and scores of advocacy groups disapprove of this program. Besides this, the President was recently approached by 244 economists for reconsideration of this program. A bipartisan bill for repealing this program, H.R. 10, which is co-sponsored by 79 Republicans and 54 Democrats, is pending in the House of Representatives. The President is being advised to support this legislation.

Over the years, many Medicare reforms have been instituted by federal lawmakers so that federal spending is decreased. In an effort to further decrease Medicare costs, this new bidding system was started so that home medical equipment and service providers could be targeted. Though a very small part (less than 1.5%) of the Medicare budget, this section has seen deep and frequent decreases in reimbursement rates over the last decade.

It was after hundreds of patients and providers complained about the program after it was implemented on January 1 that the legislation to abolish the bidding program was introduced. The federal Center for Medicare and Medicaid Services (CMS) has designed the bidding program in a manner that is arbitrary and severe, which has restricted the number of companies that are allowed to provide commonly used medical equipment and services. Since the program was initiated, patients, clinicians, and homecare providers have reported:

  • Identifying a local equipment or service provider is difficult;
  • Medically required equipment and services can’t be obtained in time;
  • Lack of confidence in discharging patients to home-based care leading to longer than necessary hospital stays;
  • Significantly fewer options for patients when selecting equipment or providers;
  • Compromised quality; and
  • Obscure and inaccurate information provided by Medicare.

The American Association for Homecare wrote to President Obama on June 20 asking for his support to repeal the controversial bidding system. The letter states:

“The bid program encourages ‘suicide bidding’ by using economic coercion to force providers to submit unsustainable bids necessary to win a contract in the hopes of staying in business in the short term. People who require home medical equipment are being harmed because services are being curtailed due to unsustainable pricing and they are not able to receive the equipment they need..

To protect Medicare patients who receive care in their homes, the American Association for Homecare urges you to support H.R. 1041; properly evaluate the concerns of the 244 economists, auction experts, and researchers with the competitive bidding program; and work with Congress to review and re-evaluate the DME benefit in Medicare.”

President Obama was also at the receiving end of concerns about Medicare’s bidding design for home medical equipment raised by noted economists (including 4 Nobel Laureates), engineers, and computer scientists with deep expertise in theory and practice of auctions. The 244 experts sent a letter to President Obama on June 17 which states:

“The use of non-binding bids together with setting the price equal to the median of the winning bids provides a strong incentive for low-ball bids – submitting bids dramatically below actual cost….Bidder quantities are chosen arbitrarily by CMS, enabling a wide range of prices to emerge that have no relation to competitive market prices.” The economists write that, “it is now clear that the CMS design is not an auction at all but an arbitrary pricing process.”

Millions of Americans who require oxygen therapy, enteral nutrients (tube feeding), power wheelchairs, continuous positive air pressure (CPAP) and respiratory assistive devices, walkers, mail-order diabetic supplies, and other equipment, services and supplies that allow Medicare beneficiaries to remain safe and independent at home, are directly affected by this bidding program. The bidding program was implemented in 9 metropolitan areas on January 1, 2011, in: Charlotte, Cincinnati, Cleveland, Dallas-Fort Worth, Kansas City, Miami, Orlando, Pittsburgh, and Riverside, California. Later this year, it is planned to begin in 91 additional areas.

Other patient advocacy and consumer groups that support H.R. 1041 include the Brain Injury Association of America, the Christopher and Dana Reeve Foundation, the International Ventilator Users Network, the Muscular Dystrophy Association, National Emphysema and COPD Association, the National Council on Independent Living, the National Spinal Cord Injury Association, and United Spinal Association, among others.