Medicare Bidding Program Is A "Train Wreck", American Association For Homecare Tells Ways And Means Subcommittee

Main Category: Caregivers / Homecare
Also Included In: Medicare / Medicaid / SCHIP
Article Date: 14 May 2008 - 1:00 PDT

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In testimony before the House Ways and Means Subcommittee on Health, the American Association for Homecare (AAHomecare) will urge Congress to suspend a controversial, flawed Medicare bidding program for home medical equipment, calling it "a train wreck."

The congressionally mandated "competitive bidding" program was designed to reduce the number of homecare providers and reduce reimbursement rates for oxygen therapy, hospital beds, wheelchairs, and other types of home-based equipment and care in Medicare.

Today, past American Association for Homecare chair Tom Ryan will present testimony to the House Ways and Means Subcommittee on Health on behalf of the Association. His oral statement is excerpted below:

"This Medicare bidding program is a train wreck. But as this program jumps off the tracks, the attitude of CMS is clearly 'full steam ahead.' The bidding program is poorly conceived, it is fundamentally flawed, and it does not account for the way that homecare providers currently compete for business.

But the real tragedy is the negative impact on Medicare beneficiaries. Problems with the design and operation of the bidding program will seriously reduce beneficiary access and the quality of care and products that beneficiaries currently receive.

This program is not the free-market miracle that some have characterized it to be. The term 'competitive bidding' is dead wrong. This bidding program will, in fact, radically reduce the number of accredited suppliers that are allowed to compete."

The American Association for Homecare has long argued that this new bidding program will reduce homecare providers' ability to provide needed services, harm patient access to care, and needlessly punish established, high-quality providers. Moreover, the savings projected to result from the bidding program are overstated and will come at the expense of services for seniors and people with disabilities.

Ryan cited three examples of ways that the bidding program will create problems for Medicare beneficiaries:

- In the area of complex power wheelchairs, long-time consumers of customized wheelchairs will be forced to switch to new providers. For patients who rely on these specialty wheelchairs for daily activities, this is a drastic change.

- In the diabetes treatment area, diabetic patients will be forced to switch to different monitoring systems and supplies, which has serious implications for patient compliance. The same point is true for cancer patients who depend on enteral nutrition, or tube feeding.

- As a result of new Medicare policy for home oxygen therapy, disruptive changes in the area of home oxygen therapy are scheduled to take effect soon. The transfer of ownership of oxygen equipment and the 36-month payment cap go into effect on January 1, 2009. This will cause confusion among beneficiaries and will reduce the level and quality of services. New bidding rules only complicate these problems.

Ryan will conclude that, "For these reasons, the American Association for Homecare urges Congress to immediately halt the implementation of this program. The wide range of problems and questions about the program must be independently evaluated, and an alternative process to determine payment rates for home medical equipment must be explored." Tyler J. Wilson, president of the American Association for Homecare, commented, "As a result of this flawed bidding program, we are likely to witness higher costs as hospital stays lengthen due to more complicated hospital discharge logistics, more emergency room visits, and costshifting from Medicare Part B to Part A services."

The Association has received word from hundreds of durable medical equipment providers who say they have been improperly disqualified from the bidding program by the Centers for Medicare and Medicaid Services (CMS). The home medical sector consists primarily of small to medium-sized businesses that receive about 50 percent of their revenue from Medicare patients.

Loss of this business will result in layoffs and business failure for many home medical equipment companies. The American Association for Homecare is pursuing regulatory, legislative, and legal remedies to allow for review of the cases of those home medical providers that have been disqualified.

The American Association for Homecare (AAHomecare) represents providers of durable medical equipment and related services and supplies as well as equipment manufacturers. AAHomecare members serve the medical needs of millions of Americans who require home oxygen equipment, wheelchairs and other mobility products, hospital beds, medical supplies, inhalation drug therapy, home infusion, and other medical equipment, therapies, services, and supplies delivered in the patient's home. AAHomecare's provider members operate more than 3,000 home care locations in all 50 states.

American Association for Homecare