The Facts about Medicare’s Competitive Bidding Program for Home Medical Equipment
A Response to the New York Times Editorial and Article published June 25, 2008
"Competition in Medicare should be fair and it should not lower the quality of care or reduce access for critical home medical equipment for seniors or people with disabilities.
Unfortunately, the New York Times unwisely brushes aside quality of care concerns and overlooks the additional health care costs the Medicare competitive bidding program will create for Medicare beneficiaries.
Congress has developed a bipartisan proposal aimed at improving the competitive bidding program for durable medical equipment. The program is scheduled to go into effect July 1, five days from now. Congress is trying to fix a broken bidding program that, unless improved, will eliminate thousands of qualified providers from Medicare, reduce competition among providers of DME, and lower the quality of items and services that Medicare beneficiaries have come to expect. As it currently stands, the bidding program will trigger widespread disruptions in service to Medicare beneficiaries who require oxygen therapy, power wheelchairs, CPAPs, diabetic supplies, and other items and services that help them live healthy, independent lives.
In Florida, Ohio and Texas, Medicare has awarded contracts to providers that do not meet basic state licensure requirements. This has occurred despite the fact that Medicare is touting that this program will ensure new quality standards. There are also loopholes that allow winning contractors to employ subcontractors who are not accredited and do not meet any standard of care threshold. The industry has been strongly supporting mandatory accreditation for years; if the government cannot enforce those standards, it is consumers who will suffer.
Senate Finance Committee Chairman Max Baucus (D-Mont.), who proposed several needed improvements, said, "I am supportive of competitive bidding as a means of reducing cost, but that cannot be accomplished at the expense of low quality and inconsistent care." His Republican counterpart, Charles Grassley (R-Iowa), noted, "These improvements also will help prevent many small home medical equipment suppliers from going out of business."
The efforts of Congress are not aimed at eliminating competitive bidding; instead Congress wants to delay the program for about 18 months so the government can get it right. The argument that Medicare rates for home care should be based on prices for medical equipment purchased on the Internet fails to grasp a fundamental feature of home medical equipment. The comparison discounts the hard reality that serving frail Medicare patients at home includes essential services to ensure quality of care. Buying a walker at Wal-Mart, referenced in the New York Times articles, is completely different from the service requirements imposed by both Medicare and the accrediting bodies, even for walkers which appear to be the simplest item of equipment. The Medicare supplier standards and the Joint Commission on the Accreditation of Healthcare Organizations requires providers to conduct patient/caregiver education to prevent falls in the home, and even Medicare supplier standards require patient education. Not to mention the two-hour turnaround that hospitals require for discharge, home delivery, intense paperwork and billing requirements imposed by Medicare for something as seemingly simple as a walker.
The law requiring bidding is five years old, but the implementation rules were not announced until last year. After taking over six months to review bids, Medicare is now rushing implementation, issuing policies via conference calls just three weeks before the go-live date, and mailing thousands of inaccurate brochures to beneficiaries with fewer than six business days before July 1. As a result, beneficiaries are upset and confused.
Taxpayers will recoup every dime of the savings that immediate implementation of the flawed bidding program would have reaped. The homecare industry has agreed to billions of dollars in payment cuts to pay for the delay. If not fixed now, a bad program spreads to 70 more cities in the months ahead. The proposed improvements will still save billions and preserve quality and access for seniors and people with disabilities.
Finally, Medicare does not pay equipment “makers” as the New York Times suggests. Rather, equipment makers, or manufacturers, sell their products to thousands of home care providers, which Medicare calls “suppliers.” Home care providers supply the items and services to consumers in their homes, file claims on behalf of beneficiaries, and comply with scores of federal, state and local requirements, including extensive documentation that Medicare mandates.
Visit http://www.nytimes.com/2008/06/25/opinion/25wed1.html?ref=opinion to read the full editorial and post a comment or read the article in the business section at: http://www.nytimes.com/2008/06/25/business/25leonhardt.html?_r=1&scp=1&sq=competitive+bidding&st=nyt&oref=slogin.