Monday, December 20, 2010

Contact Your Representatives to Tell Them About the Problems Being Caused by Competitive Bidding!

CMS is moving forward with Medicare’s Competitive Bidding Program despite problems in implementation. More than 160 leading economic experts predicted that this bidding program will fail, and patients and providers in the initial nine metropolitan areas are seeing these economists’ predications come to life.

In recent weeks, the following red flags have been reported:
  • Some companies that were awarded bidding contracts that are bankrupt;
  • Errors on the website providing misinformation to beneficiaries;
  • Incorrect materials sent to beneficiaries outside of bidding areas instructing them to switch to contract providers;
  • Lack of required state licensure among some bid winners; and
  • Credit problems among a significant percentage of the bid winners.
The government cannot allow these mishaps and errors to jeopardize the health and well-being of those who rely on home medical equipment. Write your Representative and ask them to stop this badly design system. We need to Save Homecare Now!

Please forward this message to your friends and colleagues, and ask that they sign up to receive updates from the campaign to Save Homecare.

Friday, November 5, 2010

Medicare Policy Changes Will Make it More Difficult for Nevada Beneficiaries to Obtain Power Wheelchairs

Will power wheelchairs continue to be available to Nevada’s Medicare patients following a series of federal regulatory and policy changes?

There are grave concerns among consumer groups, Medicare beneficiaries and homecare equipment providers in Nevada that the changes in Medicare policies may severely hamper the ability of providers to supply quality products and services to beneficiaries.

One of the biggest threats is a new law establishing that the Medicare program will pay rental payments over a 13 month period to homecare equipment providers after they supply power wheelchairs to Medicare beneficiaries. The change will create significant cash flow problems for providers, who will be forced to purchase the equipment from manufacturers, and then receive reimbursement payments stretching over 13 months. Previously, Medicare beneficiaries could request that the government purchase the equipment for them in the first month of use.

“We fear that the Medicare mobility benefit won’t be available for the people who need it because there won’t be providers around to fill the power wheelchair prescriptions once doctors order them for their patients,” said Corrie Herrera, rural director for the Northern Nevada Center for Independent Living in Elko, Nevada. “Our organization, as well as others across the state who represent people living with disabilities, feel that the Washington policymakers don’t understand how much a power wheelchair means to the people who need them. We must ensure that Medicare patients continue to have access to this equipment.”

Herrera said physicians prescribe power wheelchairs to patients needing assistance with critical daily activities, such as grooming, getting to the bathroom and preparing food. By continuing to perform these tasks in their homes with power wheelchairs, Herrera said it often delays the necessity of placing beneficiaries in expensive nursing homes. Mobility assistance also reduces emergency room visits for Medicare patients, who are less likely to suffer injuries from falls.

Jason Turner, 43, of Las Vegas, said his power wheelchair has made a dramatic difference in his life. Turner, who has multiple sclerosis, said he has used a power chair for a dozen years. “It is like getting my legs back,” said Turner. “I can help my daughters with their homework; and I have the freedom and independence to go wherever I need to go.”

Moreover, Turner said that he is relieved not to be a “burden” on anyone because he can do so many things for himself. “I hope that power wheelchairs remain available for other Medicare beneficiaries,” he said. “Being mobile changes your life.”

But in recent years, changes in Medicare policies have significantly impacted providers, hampering their ability to supply quality home medical equipment and services to Medicare beneficiaries. Over the last five years, the Medicare program has cut reimbursements for power wheelchairs by more than 35 percent. At the same time, the providers are experiencing excessive government audits and extended delays in reimbursement payments.

The new rental reimbursement policy will slash providers’ cash-on-hand by 40 percent in the first year. Because of the struggling economy, providers are unable to obtain loans or credit lines that would allow them to purchase power wheelchairs from manufacturers and do the necessary servicing so that Medicare beneficiaries have properly-adjusted equipment. Many Medicare patients would receive chairs stored in warehouses that haven’t been specially fitted to address the individual needs of the patients.

To read the full story, click here or visit for more information about this issue.

Thursday, November 4, 2010

Round One Bid “Winners” Finally Announced as New Questions Arise about Flawed Program

The Centers for Medicare and Medicaid Services announced winners of Round One of the “competitive” bidding program. The overdue announcement leaves little time to make the required administrative and operational changes before the January 1 implementation. Those changes relate to regulations including “grandfathering” notifications to patients, subcontracting arrangements, and changes in company ownership. Medicare beneficiaries have received little information to date about the coming changes.

Click here to see the full list of bid winners.

Meanwhile, another study, by Cal Tech economics professor Charles R. Plott, outlines the severe design flaws in the bidding system. The new study concludes that the fundamental flaws in the Medicare bidding system will prevent any “quick fix.” A draft report of the study dated October 2010 concludes that:

• Good auction architectures for procurement applications do exist.
• The proposed Medicare supplies auction is not a good procurement auction. It is based on an inappropriate architecture that cannot deliver services at competitive rates and qualities.
• The Medicare supplies auction architecture cannot be adjusted in some simple way. There is no “quick fix”. The two central pillars of the auction are flawed. First, the price determination by the median accepted bid is not an appropriate method for determining price. Second, the ability of bidders to cancel bids is an inappropriate guide for competitive bidding strategies.

See the full study here.

This adds to the argument made by 166 economists and auction experts, including two Nobel laureates, who have urged key congressional leaders and committees in Congress to scrap the system and start over. Click here to view letters.

Monday, November 1, 2010

Mobility Matters: Power Wheelchairs Change the Lives of Medicare Beneficiaries

Ten years ago, Keli Babcock faced a crisis. A medical condition was affecting her legs and her lungs, requiring that she use a ventilator. She couldn’t walk or even maneuver a manual wheelchair. Mobility had become a difficult challenge.

But Keli wasn’t about to give in, she aspired to accomplish much in life. The Medicare program provided the teenager with a power wheelchair, one that is powered by batteries and includes equipment that allows a ventilator to ride along with her.

Keli is supported by her loving family, but with the power wheelchair she was able to care for herself and not be dependent on others. She can get to the bathroom, prepare meals and perform other daily necessities of life in her home.

What transpired exemplifies the impact that a power wheelchair can have on someone with limited mobility: Medicare helped vastly improve Keli’s quality of life. With the mobility issues mitigated, Keli went on to achieve many of her goals, as well as give back to her community. Keli finished high school, and then earned a Bachelor’s Degree in Social Work from Weber State University.

“I wouldn’t have been able to accomplish much without the power wheelchair,” Keli says. “It has made a tremendous difference in my life. I can move around my home, I work, and I’ve been able to travel. None of those things would have happened if it weren’t for the power wheelchair that Medicare provided.”

Keli, now 27, works at the Tri-County Independent Living Center in Ogden, where she helps patients with mobility limitations overcome their challenges. “I tell people my story, and what I have had to overcome, and hope it will inspire them,” says Keli, who a year ago was crowned Ms. Wheelchair Utah for 2010. Her winning platform was: “You are unique. Live it. Love it. Rock it!”

And Keli reiterates the importance of her power wheelchair: “My wheelchair has meant everything to me. It means so much when people are able to gain more freedom and independence from mobility assistance.”

Around the country, there are thousands of power wheelchair users who are just as thankful to Medicare for providing the mobility assistance they depend on. But in Washington, it certainly seems that the Medicare mobility benefit is undervalued. Far too often, when Congress or the Administration searches for budget cuts, the Medicare mobility benefit is the target. It’s unfair that some of the most vulnerable Americans—senior citizens and people living with disabilities, bear more than their share of sacrifices.

Due to a series of pricing, policy and regulatory changes, there is widespread concern about whether power wheelchairs will continue to be available for Medicare patients after their doctors prescribe mobility assistance. There also could be lengthy delays before wheelchairs are delivered.

These circumstances will result from decisions to eliminate a Medicare patient’s right to have a new power wheelchair purchased for them in the first month that they receive it and a badly flawed procurement “bidding” program that will reduce the number of providers in specific locations rather than create competition. Many home medical equipment providers and consumer advocates have asked Congress to take steps to ensure that these policy changes won’t restrict Medicare patients’ access to power wheelchairs.

If prescriptions for power wheelchairs can’t be filled in a timely fashion, it’s clear that many Medicare beneficiaries, people like Keli Babcock, as well as senior citizens and patients with medical conditions that severely limit their mobility, will suffer in the future. Thousands of Americans depend on their Medicare power wheelchairs. Power wheelchairs can prevent Medicare beneficiaries from suffering injuries from falls, delay placements in expensive nursing homes and allow patients to age gracefully in their homes.

Richard Gaskin, of Montclair, N.J., suffered injuries 23 years ago that limited his mobility. Until a few years ago, Richard was able to maneuver a manual wheelchair. But eventually, he no longer had the strength to do it and constantly needed help from family and friends.

Today, he is grateful that in 2008 Medicare provided him with a power wheelchair that has changed his life.

“I couldn’t get around in a manual wheelchair anymore,” Richard says. “I was stuck in one place, and it was so difficult to get around. I needed someone to push me all the time. Now I have more independence. The power wheelchair does so much for me. I can get around on my own.”

Jason Turner, of Las Vegas, also depends on his power wheelchair. Jason says his power wheelchair has made a dramatic difference in his life. Jason, who has multiple sclerosis, received a power wheelchair though Medicare 12 years ago. “It is like getting my legs back,” Jason says, adding that it is so much easier to perform simple tasks at home such as helping his young daughters with their home work. “I have the freedom and independence to go wherever I need to go.”

Just as importantly, Jason is relieved not to be a burden on his family and friends because, with his power wheelchair, he can do things for himself.

Tyler Wilson, president of the American Association for Homecare (AAHomecare), says Washington policymakers should hear the stories of people like Keli, Richard and Jason.

“Far too often, policies and regulations are concocted in Washington by people who don’t fully understand the impact that their actions will have in places like Ogden, Montclair and Las Vegas,” Wilson says. “The Medicare mobility benefit has successfully allowed many people to overcome physical challenges that limit their mobility. It has kept Medicare beneficiaries out of hospital emergency rooms by reducing their falls and helps increase their mobility in their homes and their communities.”

Policymakers, says Wilson, should recognize the value of mobility assistance to those who need it.

“We need policies and regulations that help people increase their mobility,” Wilson says, “not measures that restrict access. That’s going in the wrong direction.”

To learn more about mobility issues, please visit

Friday, October 29, 2010

New England Journal of Medicine Underscores Relevance of Homecare

An October 20 article in the New England Journal of Medicine states that, “ultimately, health care organizations that do not adapt to the home care imperative risk becoming irrelevant. It seems inevitable that health care is going home.”

The article describes the demographic, clinical, economic, and technological forces that are making home-based care an “imperative” for healthcare. The article, by Steven H. Landers, M.D., of the Cleveland Clinic, cites oxygen as an example of advances in portable medical technology, and cites parenteral nutrition and infusion as examples of care that are both cheaper than and as equally effective as institutional care.

Landers notes that in 20 years, there may be more than 70 million Americans age 65 and older. “Many of these older adults will have limitations on their activities, including difficulty walking and transferring from bed to chair, that make leaving their homes difficult. Bringing care to the home improves access for such people, especially those living in older homes with hard-to-negotiate entryways and those with limited resources for transportation. Older adults are particularly prone to complications of confinement in hospitals, such as delirium, skin conditions, and falls. Treating people at home may be one way to avoid such complications.”

Thursday, October 14, 2010

CMS Misses Deadlines for Bid Program and Providers and Patients Get Little Information

Missed deadlines for the “competitive” bidding program will needlessly complicate care for the millions of Americans who depend on home medical equipment and services. During the September 15, 2010 House Energy and Commerce Committee hearing on the HME bidding program, Laurence Wilson from CMS reassured the committee that the program was moving forward without any difficulties. He said that he was confident that all the contacts in the Round One areas would be signed and CMS would release information regarding bid winners sometime in September.

It is now mid-October and CMS has failed to release any information on the bid process or winning contracts. If CMS still plans to begin implementation of the bid rates in Round One areas at the beginning of next year, it will leave little time for HME referral sources, discharge planners, providers, and patients to prepare for such a drastic change in the delivery of HME – placing beneficiaries’ safety at risk.

“In an Administration that touts transparency and open government, CMS has once again failed to provide basic information about the bidding process,” said Tyler Wilson, AAHomecare president. “Without this important information, it is impossible to analyze whether or not Medicare patients will receive the proper equipment and services they need.”

To address the fatal flaws in HME competitive bidding, AAHomecare is urging Congress to immediately stop the implementation of this bidding program and work with the HME community to ensure accurate pricing, while at the same time ensuring access to quality care for Medicare beneficiaries.

Thursday, September 30, 2010

NY Times Freakonomics: Fix Medicare's Bizarre Auction Program

The New York Times Freakonomics blog post today titled, “Fix Medicare’s Bizarre Auction Program,” explains that “for the last ten years, the Centers for Medicare and Medicaid Services has been testing an auction approach that is incredible in the inefficiency of its flawed design.”

The article explains that “Medicare should junk the flawed procurement auction rules and take advantage of the enormous advances that have been made in auctions and market design to fix the auction rules.”

In conclusion, “The mystery is why the government has failed over a period of more than ten years to engage auction experts in the design and testing of the Medicare auctions. The letter confirms that any expert would be able to quickly identify fatal flaws in the Medicare competitive bidding program. We suspect the problem is that CMS initially did not realize that auction expertise was required, and once they spent millions of dollars developing the failed approach, they stuck with it rather than admit that mistakes were made. This bureaucratic inertia is seen not just in government but in all organizational decision making.”

To read the full post, click here.

San Bernardino Sun Prints Rebuttal to Medicare Bidding Story

Esta Willman, owner of Medi-Source Equipment and Supply, Yucca Valley responded to a Medicare “competitive” bidding story which was published in the San Bernardino Sun. Willman states, “As someone who works with Medicare beneficiaries every day, it was disappointing to read the Sun’s recent editorial “Saving Money on Equipment,” which discusses Medicare’s “competitive” bidding program for home medical equipment. In addition to the factual errors, the editorial fails to examine the consequences that the program will have on patients and the Inland Empire.”

In her response, Willman points out that, “Furthermore, Medicare’s “competitive” bidding program for home medical equipment is a misnomer. This program is actually designed to eliminate about 90 percent of the equipment providers in a given market area, which reduces competition based on quality and service. As a result, it will be harder to ensure access to homecare – which is the most cost-effective setting for post acute care. Good home-based care for seniors and people with disabilities is not only cost-effective, but it also prevents much higher spending in more expensive settings – reducing the number of emergency room and hospital visits, speeding the hospital discharge process, and helping keep seniors safe and independent at home, rather than in far more expensive nursing facilities.”

To read the full article, visit

Experts on Bidding Say CMS System Will Fail

One hundred and sixty-six of the world’s authorities on auctions and competitive bidding systems sent a letter to Congress earlier this week outlining severe problems with the Medicare bidding program for durable medical equipment.

The experts don’t oppose the idea of using a bidding system to set prices but they point out that the CMS bidding program has four severe flaws:
• The bids are not binding.
• Median-bid pricing encourages low-ball bids.
• The use of composite bids distorts prices.
• Lack of transparency undermines the system.

The experts conclude, “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… We recommend that the government fix the flaws in the current auction program and develop a new design that emphasizes the key features of successful designs. Implementation of the current design will result in a failed government program.”

Please share the letter with your Representative and Senators and with your local and state chapters of AARP and other organizations that advocate for seniors or patient groups.

Tyler Wilson, AAHomecare president, said, “It’s one thing for us to predict that the bidding program will not fly. But when 166 respected experts – who can envision a well-designed competitive bidding program – independently warn the program will go down in flames, that should send up real warning signals there’s trouble ahead.”

Most of the experts who signed the letter are professors or staff at leading universities throughout the world including Yale, Harvard, Stanford, MIT, London School of Economics, University of Chicago, University of Pennsylvania, Duke, Columbia, California Institute of Technology, and Cornell, among others. (The letter states the signatories’ views are their own and do not represent the views of any organization.)

The economists’ letter was addressed to Rep. Pete Stark who chairs the House Ways and Means Subcommittee on Health. The subcommittee appears to be skeptical of CMS claims about the virtues of the bidding program. Stark forwarded the letter to CMS Administrator Donald Berwick yesterday with a cover letter that reiterates the experts’ concerns: “[I]f not addressed these flaws will ultimately reduce beneficiary access to necessary equipment, lead to lower quality items and services, and could increase fraud and abuse.”

Economists Peter Cramton of the University of Maryland and Brett E. Katzman of
Kennesaw State University led the effort to gather the signatures and draft the letter.

An excerpt follows:
Four main problems
The first problem is that the auction rules violate a basic principle of auction design: bids must be binding commitments. In the Medicare auction, bidders are not bound by their bids. Any auction winner can decline to sign a supply contract following the auction. This undermines the credibility of bids, and encourages low-ball bids in which the supplier acquires at no cost the option to sign a supply contract.

The second problem is a flawed pricing rule. As is standard in multi-unit procurement auctions, bids are sorted from lowest to highest, and winners are selected, lowest bid first, until the cumulative supply quantity equals the estimated demand. What is odd is that rather than paying winners the clearing price (the last-accepted bid), the auction pays winners the unweighted median among the winning bids. This is unique in our collective experience. The result is that fifty percent of the winning bidders are offered a contract price less than their bids. This median pricing rule further encourages low-ball bids, since a low bid guarantees winning, does not impact the price, and gives the supplier a free option to sign a supply contract. Even if suppliers bid their true costs, up to one-half of the winning suppliers would reject the supply contract and the government would be left with insufficient supply. Others may accept the contract and cross-subsidize public patients with the revenue from private patients, or just take a loss. This pricing rule does not develop a sustainable competitive bidding process or healthy supplier pool.

The third problem arises from the use of composite bids, an average of a bidder’s bids across many products weighted by government estimated demand. This provides strong incentives to distort bids away from costs—the problem of bid skewing. Bidders bid low on products where the government overestimated demand and high on products where the government underestimated demand. As a result, prices for individual products are not closely related to costs. Bid skewing is especially problematic in this setting, since the divergence between costs and prices likely will result in selective fulfillment of customer orders. Orders for low-priced products are apt to go unfilled.

The fourth problem is a lack of transparency. It is unclear how quantities associated with each bidder are determined. These quantities are set in a non-transparent way in advance of the auction. Bids from the last auction event were taken in November 2009, and now more than ten months later, we still do not know who won contracts. Both quality standards and performance obligations are unclear. This lack of transparency is unacceptable in a government auction and is in sharp contrast to well-run government auctions such as the Federal Communications Commission spectrum auctions.

Click here to view the full letter.

Monday, September 20, 2010

USA Today Cites AAHomecare Dedication to Stopping Fraud

A front-page story in the September 20 USA Today reports on proposed regulations to crack down on Medicare and Medicaid fraud. The paper quotes Michael Reinemer of the American Association for Homecare saying, “Nobody is more anxious to stop fraud than we are because the legitimate providers are the ones that suffer.”

The proposed rule is open for comments, and final regulations will be published at the end of the year. To review the proposed rule, visit Click here to read the full USA Today article.


Members of the American Association for Homecare have zero tolerance for fraud. The Association has been frustrated that it has taken so many years for Medicare to deal effectively with the fraud problem at the front-end rather than relying on the pay-and-chase system of catching criminals after theft has occurred.

AAHomecare introduced an aggressive 13-point anti-fraud legislative action plan in 2009, parts of which were adopted in legislation proposed by Congress and enacted into law. See The 13-point plan includes proposals such as real-time claim audits, higher penalties for fraud, more federal funding for anti-fraud programs, and a dedicated anti-fraud office at the federal Centers for Medicare and Medicaid Services (CMS), part of HHS.

Two important anti-fraud measures in federal law took effect a year ago. One is an accreditation requirement: all providers of home medical equipment in Medicare must be accredited by an agency approved by CMS. This is a lengthy, expensive process that should have had a significant impact on fraudulent activity related to home medical equipment, or durable medical equipment. Second, home medical equipment providers are required to post a surety bond.

So a critical question is: What effect have those measures had on criminal activity? Have those measures had an impact on fraud numbers? Often, federal officials recite old numbers related to activity long before those two measures took effect. Now it’s important to review more current data, rather than out-of-date figures from 2007 or 2008. Also, discussions about fraud often conflate or blur separate issues such the “competitive” bidding program (a price-setting mechanism) or improper payments, which is not the same as fraud. Those distinctions need to be understood better by policymakers and the public.

Whitfield Shines Light on Flawed Medicare Bidding Program

The Journal Enterprise, in Kentucky, reports that U.S. Representative Ed Whitfield (KY-01) stood up for Kentucky seniors and taxpayers today, raising questions over the effectiveness of a Medicare competitive bidding program.

The article quotes Whitfield as saying, “"While I agree that we need to find ways to reduce Medicare costs, I have concerns that the current competitive bidding pilot program is poorly designed and there is real concern that the entire program could collapse under its own weight, reducing the number of home care providers in rural areas, as well as increasing costs."

Whitfield is a senior member of the House Energy and Commerce Subcommittee on Health, which held a hearing on September 15 on competitive bidding. As The Journal reports, Whitfield has been an opponent of the program, citing concerns over the impact it has on local suppliers as well as beneficiaries.

Click here to read the full Journal article. To view video of Whitfield speaking at the hearing, visit the Congressman's YouTube page at

Friday, September 17, 2010

New Senate Letter for First Month Purchase Option; Extension for House Signatures

Today, Senator Arlen Specter (D-Pa.) distributed a Dear Colleague letter asking for signatures in support of a delay in the elimination of the first-month purchase option. A similar House letter is circulating, authored by Representatives Jim Langevin (D-R.I.), co-chair of the Bipartisan Disabilities Caucus, and Glenn Thompson (R-Pa.).

Urge Senators and Representative to join these Dear Colleague letters by adding their signatures. You can reach your Representative by calling the Capitol Hill switchboard at 202-224-3121. You can also follow-up with an e-mail.

In the case of both the House and Senate letters, the chief authors are seeking bipartisan support as they gather new signatures.

ACTION ON SENATE LETTER: Urge your Senator to contact Senator Specter’s office to sign on to the Senate letter. The deadline for the Senate letter is Thursday, September 23.

ACTION ON HOUSE LETTER: Urge your member of Congress to Rep. James Langevin’s office or Rep. Glenn Thompson’s office. The deadline for the House letter is Wednesday, September 22.

The reason for the delay, which is the most realistic legislative option for a remedy now, is to allow providers to better prepare for the change and implement the change when the credit markets improve so that power wheelchair providers are better able to secure necessary financing. According to AAHomecare’s analysis, the elimination of the purchase option will reduce provider cash flow by 40 percent in the first year the policy change is implemented.

The elimination of the purchase option will create access problems to power wheelchairs, leading to beneficiaries facing increased hospitalizations, home health visits, and other clinical services for falls or other injuries suffered by those with compromised mobility.

Bipartisan support for this effort is critical. Currently, the following Representatives have signed on to the House letter:

Rep. Gabrielle Giffords (D)

Rep. Betsy Markey (D)

Rep. Mark Kirk (R)
Rep. Aaron Schock (R)

Rep. Dan Burton (R)


Rep. James Oberstar (D)

New Hampshire
Rep. Paul Hodes (D)

New York
Rep. Carolyn McCarthy (D)

North Carolina
Rep. Howard Coble (R)

Rep. Paul Kanjorski (D)
Rep. Mark Critz (D)
Rep. Kathy Dahlkemper (D)
Rep. Mike Doyle (D)
Rep. Glenn Thompson (R)
Rep. Jason Altmire (D)
Rep. Christopher Carney (D)
Rep. Tim Holden (D)

Rhode Island
Rep. James Langevin (D)

Rep. Marsha Blackburn (R)

West Virginia

Rep. Alan Mollohan (D)

Rep. Steve Kagen (D)

Northern Mariana Islands
Del. Gregorio Sablan (D)

Supporting organizations listed at the bottom of the sign-on letter include:
• American Association for Homecare
• American Association of People with Disabilities (AAPD)
• Association of Programs for Rural Independent Living (APRIL)
• National Council on Independent Living (NCIL)
• National Spinal Cord Injury Association (NSCIA)
• Paralyzed Veterans of America
• Post-Polio Health International
• United Spinal Association

To view a video about this provision, visit

Thursday, September 16, 2010

Competitive Bidding Experts Describe Flaws in Medicare Bid Program and CBO Savings Number

Inside Health Policy, a Washington newsletter, reported on September 14 that, “Independent experts on competitive bidding say CMS’ durable medical equipment bidding program is uniquely designed to set prices below a level at which many winning bidders can afford to participate, which likely will lead to product shortages.”

The article describes three “fatal” flaws with CMS’ program outlined Peter Crampton, a professor of economics at the University of Maryland: “bids are not binding, CMS sets reimbursement at the median price among winning bidders and only CMS knows how the winners were chosen…. CMS will not disclose how it determines the amount of product that each bidder is expected to supply. It’s unclear who the winning bidders are, even though bidding took place more than 10 months ago.”

Crampton along with Brett Katzman, an economics professor at Kennesaw State University in Georgia, plan to meet with the Congressional Budget Office to urge the CBO to re-estimate the potential savings from the bidding program, which Katzman describes as “drastically overstated.”

The article notes, “Apart from being professors, [Crampton and Katzman] are paid to set up competitive bidding programs. No other competitive bidding program, for any product in either the private or public sector, uses the design that CMS came up with, they said.”

New Jersey’s Allcare Medical Delivers Homecare Message at House Hearing

At a packed Energy and Commerce Committee hearing room on Capitol Hill on September 15, Karen A. Lerner, a registered nurse and wound care specialist at Allcare Medical, in Sayreville, NJ, was the lone voice opposing the “competitive” bidding program at the health subcommittee’s hearing on the program. She told the committee members the bidding program “will not achieve its desired outcomes and will in fact reduce access to care for Medicare beneficiaries, lower the quality of that care, increase costs and kill jobs.”

Lerner is a member of the American Association for Homecare and the Jersey Association of Medical Equipment Services. See her statement in the Newsroom and full testimony under What’s New at

Pictured left to right, Wendy Russalesi (JAMES executive director), Richard Lerner (Allcare), Rep. Frank Pallone, Karen Lerner (Allcare), Dr. Kevin Saluck (Allcare) at the Energy and Commerce subcommittee hearing on September 15, 2010.

Drawing on Allcare’s experience serving users of wheelchairs and respiratory services in New Jersey and Pennsylvania, Lerner provided several compelling examples about the likely negative impact on patients that would result from the bidding program.

The other witnesses who testified this morning were either in favor of the bidding program or neutral. While some of the dozen-plus members of Congress at the hearing favored the bidding program, many were highly skeptical.

HME advocates who packed the hearing room burst into applause after Texas Congressman Ralph Hall (R-Texas) delivered a scathing review of all the shortcomings of the CMS bidding program during the initial Round One and the re-bid. He noted that CMS used “abandoned rates to set the fee schedule” in the re-bidding of Round One and that in its refusal to release data about Round One bidding, “CMS seems to be hiding many flaws.”

Congressman Bruce Braley (D-Iowa) described the recent University of Northern Iowa study that predicts a steep decline in HME providers in rural states due to Round One bidding. Several others, including Betty Sutton (D-Ohio), Michael Burgess (R-Texas), and Diana DeGette (D-Colo.) raised serious concerns about the bidding program.

Henry Waxman (D-Calif.), who chairs the full Energy and Commerce Committee, defended the bidding program and brushed off concerns about access to care as “speculative threats.”

In his testimony before the subcommittee, Laurence Wilson, CMS director of the chronic care policy group, opened his remarks by repeating two extensively discredited arguments: that the bidding program will reduce Medicare beneficiaries’ out of pocket costs and that the program will reduce fraud. The first statement is only true for a small number of beneficiaries (who will suffer from the decimation of the HME sector), and the second statement is simply a red herring designed to draw attention away from CMS’ embarrassing record for fraud prevention.

Dan Levinson, of the Office of the Inspector General, Department of Health and Human Services, made the eyebrow-raising claim that HME reimbursement rates encourage fraud. By that logic, fraud would have declined dramatically over the past 10 years, mirroring the sharp reductions in HME reimbursement rates. At least one member of Congress questioned the link between reimbursement rates and fraud.

A third government witness was Kathleen King, director, health care, Government Accountability Office. In the second panel, witnesses included Alfred Chiplin, managing attorney, Center for Medicare Advocacy, Nancy Schlichting, president and CEO, Henry Ford Health System, and William Scanlon, a policy consultant, in addition to Karen Lerner of Allcare.

AAHomecare encourages HME stakeholders to continue to enlist support for the elimination program and share with your members of Congress the Dobson | DaVanzo & Associates study.

Friday, September 10, 2010

House Energy and Commerce Committee Plans September 15 Hearing on Bidding Program

The health subcommittee of the House Energy and Commerce Committee has issued a formal notice that it will hold a hearing on the Medicare “competitive” bidding program for HME on Wednesday, September 15, 2010. The hearing is titled, “Medicare’s Competitive Bidding Program for Durable Medical Equipment: Implications for Quality, Cost and Access.” The subcommittee notice stated, “This hearing will examine the conception and implementation of the competitive bidding program, the implementation of the Round One Re-Bid, and its potential effects on patients, providers, and physicians.”

A representative from Allcare Medical, in Old Bridge, New Jersey, has been asked by Subcommittee Chairman Frank Pallone (D-NJ) to testify on behalf of The American Association for Homecare and the Jersey Association of Medical Equipment Services.

The American Association for Homecare encourages HME providers and patients to attend the hearing in person to demonstrate concern about the bidding program.

The Association especially encourages HME stakeholders who are constituents of members of the health subcommittee (list below) to let committee members know about the effects competitive bidding will have on your patients and your business. Advocates can use the AAHomecare Take Action Center to find contact information, or call the Capitol switchboard at 202-224-3121 to be connected to the appropriate congressional office.

Current co-sponsors of H.R. 3970, the bill to replace the competitive program, have an * next to their name – be sure to thank those offices for their support! Members are listed by party, and in order of committee seniority.

Democratic members of the health subcommittee:

Frank Pallone, NJ - Chairman
John Dingell, MI
Bart Gordon, TN*
Anna Eshoo, CA
Eliot Engel, NY
Gene Green, TX
Diana DeGette, CO*
Lois Capps, CA - vice chair
Jan Schakowsky, IL
Tammy Baldwin, WI*
Mike Ross, AR*
Anthony Weiner, NY*
Jim Matheson, UT*
Jane Harman, CA
Charles Gonzalez, TX*
John Barrow, GA*
Kathy Castor, FL*
John Sarbanes, MD
Christopher Murphy, CT
Zachary Space, OH*
Betty Sutton, OH*
Bruce Braley, IA*

Republican members of the health subcommittee

John Shimkus, IL – Ranking Republican member
Ralph Hall, TX*
Ed Whitfield, KY*
John Shadegg, AZ
Roy Blunt, MO*
Steve Buyer, IN
Joseph Pitts, PA
Sue Wilkins Myrick, NC*
John Sullivan, OK
Tim Murphy, PA*
Michael Burgess, TX
Marsha Blackburn, TN*
Phil Gingrey, GA*

The hearing is slated to begin at 10:00 a.m. in Room 2123 of the Rayburn House Office Building. AAHomecare will provide online and/or C-SPAN viewing information when/if it becomes available.

Thursday, September 2, 2010

Mobility Matters: End of First-Month Option Threatens Access to Power Mobility

The American Association for Homecare released the eighth in a series of “Mobility Matters” bulletins focused on the threats to power mobility. The article states:

“Clearly Congress did not consider the economic consequences of putting additional financial stress on these homecare businesses at a time when banks and other lenders have a tight rein on credit. The problem for these businesses is that many providers cannot secure the capital or credit necessary to cover the overhead and upfront costs of acquiring power wheelchairs while waiting 13 months for full payment. In fact, most banks cite the unpredictability of the Medicare program and the risk associated with the 13-month billing period as reasons for not backing the providers. In addition, Medicare receivables cannot be assigned to securitize lines of credit.

So in short, the government is telling providers to find upfront cash to pay for power wheelchairs, deliver those chairs to Medicare patients, and then wait to be reimbursed over a 13-month rental period. This would force the homecare providers to do what the nation’s banks are refusing to do – provide the credit for Medicare patients to receive power mobility. This scenario is totally unreasonable in the current economic climate.”

Tyler Wilson, president of AAHomecare, commented, “Congress and CMS should heed these warnings from the homecare community and advocates for people living with disabilities. Medicare beneficiaries are about to become victims of very bad public policy. Lawmakers should not be adding to the burdens of some of the most vulnerable people in our society. Taking away access to mobility is wrong. And this can be averted by Congress acting to delay implementation of this policy.”

Click here to read the full Mobility Matters article.

Urge Congress to Sign Letter to Delay End to the First-month Purchase Option

ACTION: Please ask your member of Congress to sign an important letter that requests a one-year delay of the elimination of the option to purchase a standard power wheelchair during the first month of use. Representatives Jim Langevin (D-R.I.), co-chair of the Bipartisan Disabilities Caucus, and Glenn Thompson (R-Pa.) are co-leads of a “dear colleague” letter requesting a one-year delay to eliminate the option. The dear colleague and sign-on letter were circulated to all House offices yesterday afternoon.

It is vital that you contact your member of the House of Representatives and urge him or her to contact Representatives Langevin or Thompson’s office and agree to sign this important letter. You can reach your Representative by calling the Capitol Hill switchboard at 202-224-3121.

Section 3136 of the Affordable Care Act (ACA), a provision in the health care reform law, will eliminate the first-month purchase option for standard power wheelchairs beginning January 1, 2011.

Many providers are unable to secure the capital and credit necessary to cover the up-front cost of acquiring the power wheelchair and then wait 13 months to receive full payment. Additional guidance and implementation time is needed to transition to this significant change in a manner that will not jeopardize access to care. Without access to power wheelchairs, beneficiaries will face increased hospitalizations, home health visits, and other clinical services for falls or other injuries suffered by those with compromised mobility.

The Association, along with consumer advocacy groups, is strongly urging Congress to delay implementation of the mandatory standard power wheelchair rental provision for one year. This will provide time for the homecare sector to secure financing and make the necessary business and system changes in a manner that will limit the negative impact on their businesses and Medicare beneficiaries with a medical need for a power wheelchair.

It is critical to have bipartisan support on delaying the elimination of the first-month option provision to enable power wheelchair providers’ much-needed time to secure additional financing and adjust their business models so that consumers will not see interruptions or reductions in access to equipment and services.

Supportive organizations listed at the bottom of the sign-on letter include:
• American Association for Homecare
• American Association of People with Disabilities (AAPD)
• Association of Programs for Rural Independent Living (APRIL)
• National Council on Independent Living (NCIL)
• National Spinal Cord Injury Association (NSCIA)
• United Spinal Association

In addition, Paralyzed Veterans of America added their support of this delay today. The deadline to sign on to this letter is Friday, September 17, 2010.

To view the full letter, click here.

Tuesday, August 31, 2010

CMS Rejects Congressional Request to Release Bid Winners, Ensure Transparency

In a letter to Representatives Jason Altmire (D-Pa.) and Ralph Hall (R-Texas), CMS rejected the request of 136 members of the House of Representatives requesting greater transparency in the bid process. The letter, which AAHomecare received from congressional sources, will also be sent via mail to all the cosigners of the August 11 transparency letter.

In the response, the Centers for Medicare and Medicaid Services (CMS) outlined what they consider a number of improvements that have been implemented to the program but declined to make public the list of providers whose bids were used to determine the single payment amounts in the nine bidding areas. They provide the following explanation for their decision:

“First and foremost, we believe that providing a series of interim lists of suppliers would result in beneficiary confusion, undermining the orderly and effective implementation of the program. In addition, we have not yet notified the suppliers whose bids were not among the winning bids and we believe that these suppliers should be notified before the names of the suppliers with winning bids are released to the public. Further, announcing a subset of suppliers before the contracting process is complete could be viewed as giving those suppliers an unfair competitive advantage."

"In addition, the premature release of information may jeopardize the procurement process itself. At the request of the DMEPOS industry, the Request for Bids, which outlined the requirements governing the bid submission and evaluation process, indicated that bidder information could only be disclosed in an anonymous or aggregate format and that proprietary information would be protected from disclosure. Further, standard procurement rules prohibit disclosing the identities of bidders until after contracts are final.”

CMS plans to release the names of contract winners by the end of September, however there is no statutory requirement that they do so. AAHomecare is concerned this time frame will not allow sufficient congressional review and time to educate beneficiaries. To read the letter from CMS, please click here.

Thursday, August 26, 2010

Independent Study Says Bidding Program Could Lead to Decline in Patient Choice, Access, and Quality

The first independent study focused on the patient impact of the “competitive” bidding program for HME predicts that the program may produce a number of negative outcomes, including fewer choices, reduced access to care, and lower quality products for the Medicare beneficiaries who depend on home medical equipment and services.

The study, by health economics consulting firm Dobson DaVanzo & Associates, includes an extensive literature review (government reports, congressional testimony, journal articles) as well as interviews with representatives from patient advocacy groups, beneficiaries, discharge planners, academic experts, and the HME community.

The Association encourages all HME professionals to use the talking points from the study for meetings with your Representatives and Senators during the remaining three weeks of the congressional recess.

An executive summary of the findings is available now, with highlights below. The full report will be available in mid September.

Key Findings of Dobson DaVanzo Study

Marketplace Implications:
• The design of the competitive bidding program creates economic incentives that could have a negative impact on price, quality, and service for Medicare beneficiaries.

• The design of the CMS competitive bidding process is highly susceptible to “gaming,” allowing sophisticated bidders to use complex rules and the volatility of supply and demand to their advantage.

• The three-year bid period, the composite price structure used to calculate prices, and both “predatory” and “suicide” bidding could produce unrealistically low bid prices incompatible with sustained service and product quality.

• Fewer suppliers could lead to less price competition over the long term, not more.

• Freedom of choice will be challenged for beneficiaries both in terms of types of suppliers and types of equipment that will be available.

• The competitive bidding program could eliminate up to 90 percent of DMEPOS suppliers, limiting choice of preferred providers and disrupting long-term relationships and continuity of care.

• As the number of suppliers is reduced, beneficiaries could experience problems accessing quality equipment and services, especially over time and by geographic area.

• Lower payments to suppliers may reduce beneficiary access to high quality, brand name, and customizable equipment, and other effective supplies that are familiar to the patient.

• The competitive bidding program may not adequately protect against supplier unavailability and delayed response time, causing hospital discharge delays and/or more emergency department visits.

• The competitive bidding program may reduce the provision of various services on which beneficiaries rely to remain independent and prevent complications, such as patient evaluation, education, and training, and equipment customization, adjustment, and timely repair and maintenance.

• Suppliers may not be able to provide high quality products, and may significantly reduce the services they provide to beneficiaries.

• Suppliers may not be able to afford (and are not incentivized to provide) higher quality products, which can affect beneficiary mobility, general health condition, and quality of life.

• Technological innovation and development of high quality products may be stifled.

Monday, August 23, 2010

Pennsylvania Association Adopts AAHomecare Code of Business Ethics

The Pennsylvania Association of Medical Services (PAMS) is the first state association to adopt the AAHomecare Code of Business, helping to raise the bar for the HME community in Pennsylvania.

“PAMS is pleased to endorse AAHomecare’s comprehensive Code of Business Ethics,” said John Shirvinsky, executive director of PAMS. “We have been exploring our options for adopting a more comprehensive code of ethics on our own for more than a year, but it finally occurred to us that our industry is best served by rallying around a single Code that will set THE standard for ethical conduct in the HME industry. We hope that it becomes the ‘Good Housekeeping Seal of Approval’ for HME providers. This is a great step forward for our industry and we commend AAHomecare for leading the way.”

The Code was developed to highlight and promote the high standards practiced by homecare providers, and demonstrates this sector’s commitment to honest and transparent business practices. By adopting the Code, HME providers agree to follow ethical business practices in all of their interactions using some core principles to guide conduct:

• Comply with applicable, federal, state, and local laws and regulations.

• Promote and encourage conduct that builds trust between HME providers, patients, referral sources and private and public sector payers.

“It’s crucial that our industry have a comprehensive document which defines our business ethics and underscores our credibility,” said Georgie Blackburn, vice president of government relations and legislative affairs for BLACKBURN'S in Tarentum, Pa. “And it is appropriate that the Board of Directors of the oldest state organization in the country is the first to unanimously subscribe to the AAHomecare Code of Business Ethics! I couldn’t be more proud of the leadership shown by AAHomecare and PAMS! We truly are on the road to speaking with one voice!”

For more on PAMS, see

To learn more about the AAHomecare Code of Business Ethics, visit

The Association will also host a series of teleconferences on the Code and Compliance plans, kicking off with Introduction to AAHomecare Code & Compliance Plans: The Stakes Are Higher – Tuesday, Sept. 27 – 2:00 pm – 3:00 pm (Eastern)

Friday, August 20, 2010

Renowned Clinician Critiques Documentation Process

Documenting medical necessity for Medicare patients requiring power mobility is a frustrating experience for homecare equipment providers, as well as physicians. Even clinicians who specialize in helping those with physical disabilities call on the Centers for Medicare and Medicaid Services (CMS) to establish a far more efficient process. Today, homecare equipment providers face new guidelines that are retroactively applied to claims that were processed months, or even years, before the standards were adopted. The ramifications are severe, with many equipment suppliers facing excessive audits, claim denials that are often overturned upon appeal and payment delays that threaten their ability to continue providing power wheelchairs to Medicare beneficiaries.

Many physicians, largely because they write only a few prescriptions each year for power wheelchairs, are confused by the process for detailing patient face-to-face examinations, and the need to provide detailed patient chart notes. Recently, Mobility Matters interviewed noted clinician, Mark R. Schmeler, PhD, OTR/L, ATP, about the documentation process. Schmeler is an Assistant Professor in the Department of Rehabilitation Science & Technology at the University of Pittsburgh with over 20 years of experience in the field.

Q. What needs to be fixed for the Medicare process of documenting medical necessity for power wheelchairs to work better for beneficiaries, clinicians, physicians and providers?
A. What's wrong is that the system was wrong for many years whereby very little if any clinical documentation was required by Medicare other than a Certificate of Medical Necessity and prescription-thus there was little accountability. Then there was a sudden surge in utilization caused by an aging population, consumer marketing that increased awareness of the benefit and pockets of fraud and abuse. In addition, technological advancements made power wheelchairs maneuverable in apartments and homes of all sizes. Patients use them to help perform daily necessities, such as grooming, going to the bathroom and preparing food. Suddenly, Medicare was under pressure to stop the freight train, so they imposed new accountability and more documentation requirements that should have been in place a long time ago. Medical records need to reflect impairment, lack of function, or inability to perform a necessary activity of daily living that could not be performed without the power wheelchair. Physicians especially never had to do this in the past, nor do most really understand the intricacies of mobility devices given there is so much else they need to understand to be good general practitioners or specialists in areas of practice not necessarily directly related to rehabilitation. It is difficult to suddenly hold physicians to a new standard when things were so lax and vague for many years.

Q. Is CMS devaluing the face-to-face examination by insisting that a patient’s chart notes show a steady deterioration of their physical capabilities over a period of years?
A. The medical record including chart notes should always reflect the findings of a face-to-face examination (i.e. office visit) based on the reason for the visit. Records should also rationalize a reason for the intervention prescribed. The reality, however, is that the documentation can only be as good as the level of understanding the physician or therapist has related to the treatment intervention. Even many physicians or therapists trained in rehabilitation have limited knowledge of power wheelchairs, let alone the complexity of the new coverage policies. The reality is that once you take the time to dissect the coverage language (which most do not have the time or desire to do), it is not that complicated - especially if you have training in rehabilitation. But suddenly, physicians are being asked for an assessment of the patient’s strength, range of motion, their function, etc. Many physicians may look at the requirements, and say, “I don't do this kind of medicine, I don't know what they're looking for.”

Physicians in this situation should be referring these cases to rehabilitation specialists such as Physiatrists and/or Occupational and Physical Therapists, since this is what we do. But the policy is not completely clear this is an appropriate and acceptable referral pathway, and there's a lot of education that needs to take place. CMS should be providing better guidance to physicians, but the government feels they are in a position whereby they cannot dictate how physicians practice and that role should be left to the professional boards. They are also probably cautious not to make the process too easy given the freight train concerns – the growing number of people who will qualify for power wheelchairs as Baby Boomers age.

Q. What are the toughest hurdles that physicians face when prescribing power wheelchairs for patients?
A. In many instances they might not know or understand the complexity of the coverage policy. It is not that we as clinicians are not smart people, it is just that there seems to be a higher level of complexity to the documentation and provision of a power wheelchair or scooter that addresses pretty obvious needs compared to other similar interventions like artificial limbs or braces.

It can also be confusing for clinicians when different homecare equipment suppliers approach the process in different ways. Some provide lots of detailed information, and even give forms to the physician that can simplify the process. But CMS has tried to impose guidelines to prevent physicians from signing documents provided by homecare suppliers. When this occurs, CMS often denies the claims, saying these forms are outside of their guidelines. But homecare suppliers cite provisions of the National Coverage Determination in their appeals and often win their cases before administrative law judges. This discrepancy must be clarified so that all of the stakeholders – patients, physicians, clinicians and homecare providers – understand the appropriate process.

Meanwhile, other homecare providers adopt a different approach, but it places more documentation burden on the clinicians. These providers don’t give much direction to the physicians and clinicians, leaving them to wade through the complicated documentation process. Oftentimes, physicians and clinicians are at a disadvantage in these circumstances because they will tend to lean towards simpler processes because we already have enough documentation burdens. Clearly, all the stakeholders would benefit from the establishment of a more concise policy that everyone agrees contains the practices to be followed.

Still, it certainly seems powered mobility has been singled out, creating a double standard. There is not as much scrutiny, for example, with lower limb prosthetics. Medicare has developed a pretty straightforward functional classification system for those who qualify for prosthetic devices. A similar policy would work well with regards to other mobility devices including powered mobility. This is also a societal value issue that has trickled into Medicare policy. Artificial limbs provide mobility, but the perception may be that they normalizes a disability more so than a power wheelchair.

I see this across all funding and service delivery models including private insurers, Medicare and the Veterans Administration. I work with veterans who have lost limbs whereby the system seems to allow them to have several artificial limbs for one leg – one for walking, one for running, one for swimming, etc. But when you ask about a wheelchair, you find that they have been provided an old, crappy folding wheelchair, yet they use the wheelchair far more than the limbs. It is not that anyone should be denied access to the limbs they need, but the same attention should be paid to the implementation of policies that allows for access to appropriate wheelchairs.

Q. Should CMS have a standardized system for documenting medical necessity?
A. They could do more in providing guidance for powered mobility, as it is not well understood in the general medical community given coverage policies were not well defined or policed in the past. But it goes back to avoiding the notion they are dictating practice – even though coverage policies in other areas actually do this indirectly. Perhaps it is a convenient loophole to hide behind to stop the freight train as I mentioned before. But at the same time, we as an industry, through our professional associations including all stakeholders, need to identify, define, and document an acceptable standard of practice for the provision of mobility devices that CMS will likely reference for future policies.

Q. How are clinicians impacted by the flaws in the current documentation process?
A. Some clinicians are shying away from performing wheelchair evaluations because the Medicare documentation process is such a burden. Frankly, clinicians may believe their time is better spent on other types of therapy. Moreover, the documentation process becomes even more burdensome when a homecare provider is worried about the Medicare reimbursement process. The patient may have an obvious need for a power wheelchair, but the homecare provider asks that the documentation be modified or redone by the clinicians so that the case is stronger. This creates added frustration and delays. Clearly, there is a considerable gap between the intent of the documentation policy and the criteria utilized by auditors who search for any small or insignificant reason to deny claims.

Q. How are Medicare beneficiaries impacted by the documentation process?
A. Patients are inconvenienced by having to make a separate trip to see a specialist or their doctor for a powered mobility device, especially since they already have a mobility impairment that makes the trip a challenge. It is not that this extra visit is a bad thing, but they may have a perception that the process is much simpler based on the marketing by providers. Perhaps the marketing should be more comprehensive and include mentions of the role of doctors or therapists in the approval process (similar to pharmaceutical company ads). CMS could also provide more readily accessible information and guidance on their website to both consumers and clinicians.

Basically there was a swing of the pendulum from one extreme to the other – vague policy with little accountability for many years to a lot more accountability and restrictive policies that has been hard to digest and implement. It may be delaying, or even preventing, Medicare patients from receiving the power wheelchairs they need.

The bottom line is this: we have a growing population of people with mobility limitations who want to remain active participants in their homes and communities. The spirit of our nation is to allow them to keep their freedom and independence and not be stuck in a nursing home. Powered mobility is an obvious viable option for many – we just need to figure out a way to provide this in a reasonable manner that ensures those who need powered mobility get it without too much burden. The government, industry, clinicians, and consumers each have a role and stake in finding this balance. CMS is certainly in the position with the most power to facilitate these changes through appropriate policy guidance.

Monday, August 2, 2010

Miami Herald Reports on Medicare bid winner with past accusations of fraud

The Miami Herald reported on Saturday that the Centers for Medicare and Medicaid Services has awarded 17 bidding contracts to a company that settled Medicare fraud charges twice in the past eight years. According to the story, Orlando-based Rotech Healthcare paid $2 million in August 2008 to settle civil charges that it covered up Medicare over-billing in three states to avoid penalties related to an earlier fraud settlement. The previous one, which took place while the company was in bankruptcy in 2002, involved over billing in four states, including Florida.

Read the full article at:

Tuesday, July 27, 2010

Orlando Sentinel Publishes Rebuttal to Recent Medicare Column

In “My Word: Medicare bidding flawed,” Aaron Bates from Orlando, Fla., discusses the flaws in a recent column on Medicare’s competitive bidding program which was printed in the Orlando Sentinel. Bates states the article is, “based upon the flawed premise that medical equipment and related services (oxygen therapy, wheelchairs, etc.) delivered to Medicare beneficiaries in their homes should be reimbursed based on what one would pay on the Internet or at a retailer for the equipment alone.

As someone who has used a wheelchair since the age of 4 due to a form of muscular dystrophy, I can tell you that a power wheelchair, specifically fitted for my disability, cannot be acquired over the Internet.

Even oxygen, as a regulated prescription drug, can't just be picked up at a local Walmart. Should a user who depends on supplemental oxygen to stay alive pick it up at Walmart, adjust the flow rate, and maintain this system, plus a back-up, on their own? Will Walmart provide emergency supplies of oxygen after a hurricane when the power's out?”

To read the full piece, visit,0,6622438.story.

Wednesday, July 21, 2010

Nation Celebrates 20th Anniversary of ADA

The Americans with Disabilities Act (ADA), was signed into law on July 26, 1990. More than 54 million Americans with physical or mental impairments that substantially limit daily activities are protected under the ADA, including many of the beneficiaries cared for by the HME community.

“This landmark legislation is important to millions of Americans who are served by the home medical equipment community and it’s a good opportunity to remind policy makers and the media about the importance of HME,” said Tyler Wilson, president of the American Association for Homecare.

West Coast Activities Include:
The Silicon Valley Independent Living Center, in San Jose, Calif., is organizing the First Annual West Coast Disability Pride Parade and Festival which will take place Saturday, July 24, 2010. The event celebrates the 20th Anniversary of the signing of the Americans with Disabilities Act.

“With this event, we hope to send a loud message to the community that disability is a natural and beautiful part of human diversity that people living with disabilities can take pride in,” says Sarah Triano, Executive Director of SVILC. “We want children with disabilities to know they are beautiful, whole human beings just the way they are.”

For more detailed information please go to the event webpage at

East Coast Activies Include:
20TH Anniversary ADA Gala will take place at the National Press Club in Washington, D.C. on
July 26, 2010 7 – 11 pm. This special evening salutes the disability community’s crowning achievement. Representatives from Congress and the Administration will attend the Gala, along with featured performing artists. Fine food, great company, good laughs, and lively dancing— they’re all yours to enjoy as we come together to celebrate our diversity and
showcase our Power & Pride. For more information or to purchase a ticket, visit

To learn more about 20th Anniversary celebrations of the ADA across the nation and how your HME can support local events in conjunction with local and state consumer organizations, please visit

Friday, July 16, 2010

Sun Sentinel publishes opinion piece on competitive bidding

“Quality, dependable service beneficiaries will become a thing of the past once the few suppliers awarded the bid become so bogged down that they cannot handle the sheer volume of patients, forcing them to cut back services or equipment to the very people who need them the most: the old and the sick,” the opinion piece in the Sun Sentinel states. The piece titled, “Competitive bidding not the solution to Medicare's woes” ran on July 15 and was written by Diane Sori, a Cooper City resident and wife of an independent respiratory therapist contractor.

The article points out the fact that competitive bidding will mean longer, more expensive hospital stays which causes a shift in cost from Medicare Part B to Part A. It cites the example that a day of home oxygen therapy costs less than $7, while a day in the hospital costs more than $5,500.

“Competitive bidding was an ill-conceived solution to the government's failure to reign in suppliers who abused and defrauded the system. Instead of just shutting down those suppliers, they chose to place the burden of their mismanagement on legitimate suppliers whose only goal was, and is, to serve those in medical need and to make a legitimate living by doing so.”

To read the full opinion column, visit,0,5104771.story.

Thursday, July 8, 2010

ALERT: Scorching Heat Threatens Seniors

With 100-plus temperatures scorching the East Coast, excessive heat and poor air quality pose a grave health risk for seniors, particularly those living at home alone.

People age 65 and older, people who are ill, and children under four are particularly at risk. Air conditioning and drinking fluids are key defenses against extreme heat. For guidance, visit the Centers for Disease Control website information page on extreme heat.

The HME sector serves on the nation’s front line of providing healthcare to seniors. Please leave a comment and let us know what steps your company is taking to ensure the safety of patients you serve during this heat wave.

Friday, July 2, 2010

Seniors and People with Disabilities Will Pay Steep Price for Medicare’s Bid Program

Homecare Association Calls for an End to the Controversial Bidding Program that Will Cost Thousands of Lost Jobs and Business Failures and Will Not Save Money for Seniors

Seniors and people with disabilities who rely on home medical equipment and services will pay a steep price under Medicare’s controversial and mislabeled “competitive” bidding program for durable medical equipment.

The U.S. Department of Health and Human Services (HHS) announced today that bidding in nine of the country’s largest metropolitan areas could save Medicare as much as $17 billion over 10 years for home medical equipment and services. But those alleged savings are the result of “suicide bids” from providers in this ill-advised race to the bottom that will put thousands of homecare providers out of business and reduce patients’ access to care. Recognizing that the program is bad healthcare policy, a bipartisan group of 252 lawmakers in the House of Representatives support legislation that would repeal the bidding program.

“The bid prices announced by HHS today will translate into unsustainable reimbursement rates for homecare providers. Over time, it will make it harder for seniors and people with disabilities to get the home medical equipment and services they require to live independently in the most cost-effective post-acute setting – their own homes.”

The Medicare bidding program uses economic coercion to force homecare providers to submit unsustainable bids necessary to win a contract. Because Medicare is the largest third-party purchaser of home medical care, its market power effectively coerces providers to bid at unsustainable reimbursement rates to ensure the opportunity to continue serving Medicare beneficiaries. Ultimately, the below-market rates achieved through this bidding program will force thousands of businesses to close, reducing competition in the long term and reducing seniors’ access to care and choice of providers.

Congress delayed the implementation of this bidding program in 2008 to allow for needed changes, and the home medical equipment sector paid for that delay by taking a 9.5 percent nationwide reimbursement cut to pay for the projected savings from the initial round of the program. However, the Centers for Medicare and Medicaid Services (CMS) ignored congressional intent, did not address the flaws that precipitated the delay two years ago, and is now recklessly charging forward with the program in nine of the 10 largest metropolitan statistical areas in the U.S. An additional 91 areas will be subjected to the bidding process next year.

A broad, bipartisan group of 252 members of the House of Representatives has cosponsored legislation in Congress, H.R. 3790, to stop the bidding program and replace it with a fiscally responsible measure to reduce payment rates for homecare but preserve the ability of home medical providers to continue serving Medicare beneficiaries.

Other organizations that support the elimination of Medicare’s bidding program for home medical equipment include the ALS Association, the American Association for Respiratory Care, the American Association of People with Disabilities, International Ventilator Users Network, the Muscular Dystrophy Association, National Emphysema/COPD Association, National Spinal Cord Injury Association, Post-Polio Health International, and United Spinal Association, among others.

“This bidding program will further reduce reimbursement rates for home medical care which have already been cut to the bone,” Wilson said. “The program will only make it harder to receive medically required homecare. Over time, the country will see spending soar in other parts of Medicare because the bidding program will push spending into longer hospital stays and ER visits.”

Unintended negative consequences of the bidding program include:

• REDUCED ACCESS TO CARE AND SERVICE DISRUPTION – This bidding program will restrict consumer access to care and choice for home medical items and services, and it will trigger a race to the bottom in terms of quality. Less expensive items will be provided to patients. The program will disrupt the continuum and coordination of care between doctors, discharge planners, patients, and home medical equipment providers. With a loss of providers, expedient deliveries of items and services will be eliminated.

• HIGHER SPENDING IN MEDICARE – The bidding program will increase Medicare costs. It will lead to longer, more expensive hospital stays and more physician office visits, nursing home admissions, and emergency room visits.

• LESS COMPETITION, NOT MORE – The bid program is anti-competitive because it reduces the number of competitors. About 90 percent of home medical service providers would have been barred from the Medicare program in the first round of bidding conducted in 2008.

• LOSS OF JOBS AND SMALL BUSINESSES – The bidding program will result in the closing of thousands of small businesses and result in as many as 100,000 job losses nationwide.

To read the full release, visit the AAHomecare Newsroom.

Tuesday, June 15, 2010

Colorado Springs Business Journal Publishes Provider's Quote on H.R. 3790

The Colorado Springs Business Journal published the following quote about competitive bidding from the Colorado Association of Medical Equipment Services board member Doug Coleman:

“Competitive bidding sounds reasonable on the surface - however, in its current form, it is very dangerous for patients who need home medical equipment,” Coleman said. “The program forces providers to submit unsustainable suicide bids. Only one in ten providers will be awarded a bid, so nine out of ten providers will close their businesses … the ‘winning’ bidder will not be able to survive a the bid rates that were necessary to secure the contract.”

To read the full article, visit:

Tuesday, June 8, 2010

Patient Advocate Cites Benefits of Power Mobility

The American Association for Homecare published the fifth installment of Mobility Matters, a periodical which is used to inform Congress, the administration, policymakers, consumer organizations and the media about Medicare’s power mobility benefit, and the need to sustain it. Issue five reads:

For decades, Lucy Spruill has been an advocate for people living with disabilities. She has been employed at United Cerebral Palsy of Pittsburgh for eleven years as Director of the CLASS Attendant Care Program and, more recently, as Director of Public Policy and Community Relations. She served on the Board of Directors for eight years and during that time was Chair of the former Governmental Activities Committee. Ms. Spruill also served as the first ADA Coordinator for the City of Pittsburgh and has held several positions in community maternal and child health programs. Ms. Spruill, 65, has spina bifida and has needed mobility assistance for most of her life. She recently answered some questions about the challenges she has faced and those faced by Medicare beneficiaries in need of power mobility.

Q) How has a power wheelchair benefited you?
I walked with the aid of crutches for 18 years and used a manual wheelchair for 30 years before changing to power mobility. I did so because I had overuse in my shoulder muscles (rotator cuff) which caused me extreme pain when I pushed the manual chair or transferred. Once I switched to power mobility 15 years ago the pain subsided and I have had 15 more years of active life (a full time job, family and community activities, etc.) including a trip to Europe with my grown children.

Q) How important is more freedom and independence for patients once they get power mobility?
Most people who use power mobility (including myself at the time I switched) would be limited to moving about painfully and slowly in a room or two in their homes, if that. Many would be confined to bed. This would cause major health issues—respiratory decline, pressure sores, dementia or cognitive decline, depression, contractures, pain—and would probably shorten the individual’s life in addition to greatly diminishing their quality of life.

Q) What is the biggest hurdle that Medicare beneficiaries face when trying to obtain a power wheelchair?
Meeting all of the technical requirements Medicare has created to qualify for a power chair; finding funds to pay the 20% that Medicare does not pay; finding funds to pay for a backup chair or rental chair during inevitable times when the individual’s primary power chair is down for repairs.

Q) What could Medicare do to make the process easier for beneficiaries?
Medicare should be using the substantial body of medical literature which has demonstrated the usefulness of an active lifestyle in maintaining health and well-being for a longer portion of an individual’s life. Wheelchair users are like everyone else—if they are active, maintain relationships, are able to leave their homes to work, play, obtain health care, etc., they will be healthier for a longer part of their lives. Allowing the use of whatever mobility devices are needed to facilitate a healthy lifestyle would, in the long run, save Medicare money by keeping their recipients healthier.

Q) Shouldn’t the government be taking steps to increase use of power mobility since it saves taxpayer money from fewer hospital visits from falls and delays in nursing home placements?
Yes. Medicare should be supporting anything that increases a beneficiaries’ independence and healthy years of life because it saves money. Restricting an individual’s mobility so that they need more paid help from others or need to be in a restricted environment such as a nursing home, rehabilitation center, or hospital, causes Medicare to pay more money for an undesirable rather than desirable outcome.

Q) Have you come in contact with Medicare beneficiaries who need power mobility, but have not been unable to obtain it?
Yes, through friends with disabilities and in connection with my work for 10 years as the Director of a Home and Community Based Service program funded primarily by Medical Assistance, serving over 1000 persons with physical disabilities living in their own homes and needing personal assistance to remain independent in their homes.

Q) Will competitive bidding make it easier or harder for Medicare beneficiaries to obtain power mobility?
It will make it harder.

Q) Are you worried about the impact of competitive bidding?
I am worried about the impact of competitive bidding. It will reduce the number of DME providers, which is already insufficient to meet the demands of power mobility (wait times for purchase and repairs are extremely long). It will increase the likelihood that patients will get the cheapest rather than most appropriate mobility device, which will lead to difficulty using the equipment, health problems, decreased activity, safety issues, etc. By forcing patients to deal with providers who do not know them (and who may be located in another city or state), the likelihood of the patient experiencing errors in the supplying of equipment will be increased. Patients who need multiple types of equipment (respiratory equipment, mobility equipment, hospital bed, diabetic supplies, etc.) may have to deal with multiple providers. This will cause confusion on the part of the patient, lack of appropriate continuity and coordination of services, unnecessary administrative costs due to Medicare dealing with multiple providers for a single patient instead of one provider.

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Wednesday, June 2, 2010

New Jersey Home Medical Providers Call on Congress to Preserve Homecare as an Option for Seniors and People with Disabilities

Providers of home medical equipment and services across New Jersey are proposing a fiscally responsible alternative to the mislabeled “competitive” bidding scheme currently under way in Medicare that will actually discourage competition, reduce access to care for many of the state’s 1.3 million Medicare beneficiaries, and put hundreds of New Jersey homecare providers out of business.

Home medical equipment and services include oxygen therapy, wheelchairs, inhalation drug therapy, hospital beds, and other medically required services, supplies, and equipment used in the home.

“This bidding program is something that New Jersey’s Medicare population should be gravely concerned about,” says Wendy Russalesi, executive director of the Jersey Association of Medical Equipment Services (JAMES), which represents providers of home medical equipment in the state. “If implemented, this program will do nothing more than delay access to necessary medical equipment, reduce the quality of the medical equipment provided, and place additional economic strain on the small business community of New Jersey. With the recent passage of the health reform bill, this program is now slated to encompass an alarming 80 percent of our state during the second round of bidding.”

The Medicare bidding program encourages “suicide bidding,” using economic coercion by forcing providers to submit unsustainable bids necessary to win a contract. Although Congress delayed the implementation of the selective contracting program in 2008 to allow for needed changes, the Centers for Medicare and Medicaid Services (CMS) ignored congressional intent and did not address the flaws that precipitated the delay.

“For decades, durable medical equipment providers have competed in an open market on the basis of quality,” says David Ferguson, vice president and general manager of AtHome Medical in Morris Plains, N.J. “Our differentiating factors have always been the reliability of our products, the timeliness of our service, and the expertise of our clinicians and support staff. What we observed in the 2008 program implementation, which was delayed, was nearly 90 percent of the existing providers were prevented from servicing Medicare beneficiaries. The provision of care was awarded to some firms with little or no experience servicing the local market and those who had submitted unsustainably low rates, or ‘suicide bids,’ without thought as to the whether they could sustain care, let alone quality care. In an environment with reduced competition, quality always suffers.”

The bidding process is now underway in nine metropolitan statistical areas (MSAs) in the U.S., and that process begins in 91 more MSAs next year, including three MSAs that cover 80 percent of New Jersey.

“With all of the changes the homecare sector has had to absorb over the past several years, our company has had to make some very difficult decisions regarding the services and products we can continue to offer,” states Dr. Kevin Saluck, vice president of clinical operations at Sayreville, N.J.-based Allcare Medical, and president of JAMES. “CMS has forced us down a one-way street. At the end of this street, we will be forced to offer lesser quality products, fewer services and unfortunately, a much different business model to our referrals and customers.”

“Over the course of the last three years, we have increasingly moved away from Medicare business in preparation for this bidding program,” says John Gerity, CEO of Access 2 Care in Lincoln Park, N.J. “We estimate laying off one-third to one-half of our work force if the bidding program becomes a reality. Medicare beneficiaries will have less access to quality durable medical equipment companies, many of whom will be closing their doors.”

JAMES supports H.R. 3790, a bipartisan bill in Congress that would preserve access to homecare and provide a cost-effective alternative to a misguided Medicare “competitive” bidding program for durable medical equipment. H.R. 3790 replaces the Medicare bidding program with other types of cost-savings that will reduce reimbursements to home medical equipment providers but preserve patient access to medically required equipment and services in the home.

So far, the bill has 242 cosponsors in the U.S. House of Representatives with broad bipartisan support. More than half of both the Democratic and Republican delegations in the House support the bill.

More than half of the New Jersey delegation in the U.S. House of Representatives have cosponsored the bill: Representatives Robert Andrews, Leonard Lance, Frank LoBiondo, Donald Payne, Steven Rothman, Albio Sires, and Christopher Smith.

Patient and consumer groups that support the elimination of Medicare’s “competitive” bidding program for durable medical equipment include the ALS Association, the American Association for Respiratory Care, the American Association of People with Disabilities, International Ventilator Users Network, the Muscular Dystrophy Association, National Emphysema/COPD Association, National Spinal Cord Injury Association, and Post-Polio Health International, among others.

Proponents of the Medicare bidding program for durable medical equipment have perpetuated several myths about the program. However, the reality is quite different.

To read more, visit the AAHomecare Newsroom.

Monday, May 24, 2010

Government Policies Ignore Aging-at-home Concept

At a town hall meeting a year ago, President Obama said that home-based care could play a major role in controlling Medicare costs by keeping older people out of more expensive institutional care. “I actually think homecare ends up being cost-efficient in many cases rather than institutional care, and it helps keep people in their homes,” the president told his audience in the Cleveland suburb of Shaker Heights last July.

In March, Sen. Amy Klobuchar (D-Minn.) agreed with the president, declaring that “homecare is a major part of the solution in terms of cost-effectiveness” and adding that with the explosive growth in the nation’s older population, “homecare is going to be vital.”

But their voices aren’t being heard. The Medicare program doesn’t seem to agree with their assessment: while key public officials embrace the aging-at-home concept, the government has been moving in the opposite direction.

The Centers for Medicare and Medicaid Services (CMS), which oversees the Medicare program, continues to advocate for policies and regulations that will restrict patient access to medical equipment, such as power wheelchairs and oxygen, which is critical to allowing patients to age with dignity in their homes. These policies have been adopted despite research from a variety of sources that document significant financial and patient benefits.

Even the recently-enacted healthcare reform legislation follows this disturbing trend by eliminating an option allowing a Medicare beneficiary to purchase a power wheelchair in the first month that the product is prescribed. Many providers, particularly in today’s tight credit market, will have difficulty covering the upfront costs associated with providing the power wheelchair, as well as maintaining it while receiving payments over a 13-month rental period. More businesses will likely no longer provide power wheelchairs, disrupting patient access, especially in rural areas.

In addition, the government has enacted a 36-month cap on oxygen reimbursement, a policy that removes links between the payments and the medical needs of Medicare beneficiaries.

The fundamental problem is this: the CMS bureaucracy has sought to control Medicare costs by adopting policies and regulations that harm providers and slow expansion of the Medicare mobility benefit. These measures have included a 37 percent price-cut for power wheelchairs over the last three years, denial of many legitimate reimbursement claims that are later reversed after appeals, and a bidding process that will reduce competition and put providers out of business rather than increase competition.

“For more than a decade, researchers have praised aging-at-home as a concept that will save the government significant money, while being a popular option for patients who want to keep their freedom and independence,” said Tyler Wilson, president of the American Association for Homecare (AAHomecare). “But it’s puzzling that our government keeps enacting policies that make it more difficult for Medicare beneficiaries to obtain the medical equipment that can help them stay in their homes longer and save taxpayer dollars.”

Health Affairs, a leading journal of health policy, reported in its July/August 2005 issue that there are significant advantages—for the government and patients—in providing mobility assistance.

“There is consensus among consumers, policymakers, and researchers that assistive technology is important to promoting self-care and independence among people with disabilities,” Health Affairs reported. “An estimated 75–90 percent of disabled older community-dwelling adults use some form of assistive technology. Moreover, evidence suggests that such technology might be more efficacious than personal care in reducing functional limitations, might reduce reliance on personal care, and might slow functional decline and lower health-related costs. A recent survey of unpaid caregivers found that 40 percent had obtained assistive technology on behalf of people in their care to ‘make things easier.’ ”

Another study by economists Clifford L. Fry, Ph.D., Donald R. House, Ph.D., and Kent D. Nash, Ph.D, provided specific details on savings, concluding that the Medicare program pays $10,770 a year less for beneficiaries with power mobility equipment because they need fewer hospitalizations and emergency room visits associated with falls and fall-related injuries.

“The largest net savings appear in the category of inpatient expenditures,” wrote the economists, whose 2005 study used Medicare claims data to investigate the effects of power mobility equipment on Medicare’s healthcare expenditures. “This result is consistent with reports by others that mobility assistive devices can reduce falls and related hospitalizations and associated expenses… Significant Medicare savings are also reported for outpatient, home healthcare, and physician services expenditures…The combined reductions in these Medicare expenditures more than offset the increase in durable medical equipment expenditures for those receiving Medicare funding for powered mobility.”

Meanwhile, staying in their homes is a clear priority for the elderly and patients with disabilities. “Loss of independence and loss of mobility are what people with disabilities 50 and older say they fear the most as they look to the future,” AARP reported in a 2003 study. Moreover, the U.S. Census Bureau calculates that the number of citizens over 65 will more than double between 2010 and 2050, greatly increasing demand for mobility assistance.

The year-long debate over healthcare reform was supposed to usher in a new era of healthcare policy, one in which the priority was to increase efficiency by targeting taxpayer dollars to the most practical services and those that produce the best outcomes for patients.

That new priority needs to start with the Medicare program.

“The strategies are outdated, and the policies are broken,” said Wilson of AAHomecare. “What good does it do to artificially suppress utilization of homecare products when these products can ultimately save ten-fold in taxpayer dollars and allow Medicare beneficiaries the freedom and independence that they desire and deserve? We are hoping that, if Dr. Donald Berwick is confirmed as CMS administrator, he will place a priority on building a Medicare program for the future, one that adopts the aging-at-home concept that beneficiaries want, and that government can’t afford to ignore.”