Thursday, October 1, 2009

Deseret News Quotes Leavitt Saying He Was “Politically Stoned” Over Bidding Program

The Deseret News in Salt Lake City, Utah, printed an editorial by Marjorie Cortez (“Fear of Government Hinders Healthcare Reform,” Sept. 29) which severely misrepresents the facts regarding the Medicare bidding program for home medical equipment. The American Association for Homecare has responded with the following Letter to the Editor.

"The editorial piece apparently relies solely on the highly selective observations of the political appointee, former Health and Human Services Secretary Mike Leavitt, whose agency oversees this Medicare bidding program. In his own often-repeated words, Leavitt says he was “politically stoned” by opponents of the bidding program. Your editorial continues, “In a competitive bidding process, low bidders who meet the specifications win the contracts. The rest go away empty-handed. So they start complaining to their congressional representatives. And their industry representatives start pressuring members of Congress to pull the plug on the pilot project, which they did.”

Leavitt apparently did not mention any details about the bidding program, which was designed to put most of the equipment providers (competitors) out of business – even if they agreed to new, lower, competitively bid rates. If the program had been implemented as Leavitt had envisioned, the most providers would have been put out of business. How does eliminating competitors – on top of lowering prices – breed competition in the long term?

Your phrase “brief flirtation” to describe Medicare approach to competitive bidding is extremely misleading. Leavitt apparently did not mention the fact that the bidding program was briefly delayed by Congress in order to make it less of a business killer. Congress did not “pull the plug” on the program by any stretch of the imagination. It is very much alive. New regulations were issued in January 2009 and bids are due by the end of December of 2009.

Finally, Leavitt apparently did not mention the fact that the durable medical equipment community paid for every dollar the bid program had been projected to save (in the form of a 9.5 percent nationwide cut to home medical reimbursement rates in Medicare effective January 1, 2009.) Again, to be clear, this nationwide cut on the bid-upon items equals the savings that Medicare would have realized in the 10 large metro areas in last year’s first round of the bidding program.

As a result of last year’s congressional delay, the following occurred: Taxpayers reaped approximately $1 billion in savings. Thousands of small businesses were spared extinction. And tens of thousands of Medicare beneficiaries were spared disruptions to their services and access to quality medical care at home, which everyone agrees is the most cost-effective setting for care.

So, what exactly is Leavitt’s complaint? That Congress held him accountable?

Consider these statistics. The durable medical equipment sector in Medicare (oxygen, wheelchairs, hospital beds, etc.) help keep millions of Americans in their homes and out of more expensive institutional care. This sector of Medicare represents less than two percent of total Medicare spending and is growing annually at a rate of less than one percent a year. So spending in this sector is not the problem in Medicare – it’s part of the solution.

Your newspaper’s failure to cover this issue accurately or fairly or in any context is discouraging to say the least.

We would welcome the opportunity to provide a complete rebuttal as a guest editorial or at least a letter to the editor on this topic."

To read the editorial, visit

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