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.
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