Reporting Medicare Competitive Bidding for Home Medical Equipment Complaints

Introduction

Main Digest

On January 1, 2011, Medicare starts a new "competitive bidding" program for durable medical equipment and supplies in nine metropolitan regions: Charlotte, Cincinnati, Cleveland, Dallas-Fort Worth, Kansas City, Miami, Orlando, Pittsburgh, and Riverside, California. This program will affect thousands of Medicare beneficiaries who use the following equipment and related services and supplies: power wheelchairs, walkers, oxygen, CPAP and respiratory assistive devices, hospital beds, enteral nutrients (tube feeding), support surfaces, and mail-order diabetic supplies.

Medicare beneficiaries, family members, caregivers, hospital discharge planners, and clinicians can report problems, concerns, and feedback about this bidding system by calling a toll-free number, 1-888-990-0499, or by visiting the website: www.biddingfeedback.com.

By design, this new Medicare program will severely restrict the number of companies that are allowed to provide the equipment and supplies listed above. While the program is supposed to help reduce spending in Medicare, it may result in:

• Difficulty finding an equipment provider,
• Delays in delivery of equipment or services,
• Fewer choices of equipment or providers,
• Reduced quality,
• Confusion, or
• Incorrect items and or services.

The program may also result in increased spending at the emergency rooms and delayed transition from hospital care to home care.

More than 160 leading economists and auction experts, including two Nobel laureates, have warned that Medicare's bidding design for medical equipment will fail. Over the past two months, the experts have signed letters to congressional leaders criticizing the controversial bidding program.

The economic experts, who do not oppose the concept of using a competitive bidding system to set Medicare prices, found that this particular bidding program designed by CMS has alarming flaws that will prevent it from achieving its objectives of low cost and high quality home medical equipment and services for millions of seniors and people with disabilities across the country.

Bidders, the experts noted in their letters, are not bound by their bids, which undermines the credibility of the process. Additionally, the pricing rules encourage "low-ball bids" that will not allow for a sustainable process or healthy pool of equipment suppliers. Ultimately, the bid design provides "strong incentives to distort bids away from [actual] costs," and lacks transparency that is "unacceptable in a government auction and is in sharp contrast to well-run government auctions."

The economic experts' letter concludes, "This collection of problems suggests that the program over time may degenerate into a 'race to the bottom' in which suppliers become increasingly unreliable, product and service quality deteriorates, and supply shortages become common. Contract enforcement would become increasingly difficult and fraud and abuse would grow... Implementation of the current design will result in a failed government program."

Also opposing the controversial bidding program are a bipartisan group of 257 members of Congress and more than a dozen national consumer and patient advocacy groups. Those consumer groups include the ALS Association, American Association of People with Disabilities, Muscular Dystrophy Association, National Council on Independent Living, National Spinal Cord Injury Association, and United Spinal Association.

To learn more, visit www.aahomecare.org/competitivebidding

The American Association for Home-care represents durable medical equipment providers, manufacturers, and other organizations in the home-care community. Members serve the medical needs of millions of Americans who require oxygen equipment and therapy, mobility assistive technologies, medical supplies, inhalation drug therapy, home infusion, and other medical equipment and services in their homes. The Association's members operate more than 3,000 home-care locations in all 50 states. Visit www.aahomecare.org/athome

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