Medicare Bidding For Durable Medical Equipment Will Harm Small Businesses And Seniors' Access To Care, American Association For Homecare Testifies

Main Category: Medical Devices / Diagnostics
Also Included In: Medicare / Medicaid / SCHIP;  Caregivers / Homecare
Article Date: 04 Nov 2007 - 12:00 PDT

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The Medicare bidding program for durable medical equipment will hurt small providers and "undermine the nation's homecare infrastructure" unless Congress modifies the program. This is the key message that will be presented to a congressional subcommittee today by the American Association for Homecare. The Association believes the bidding program will "jeopardize patients' standard of care, choice of provider, and access to the medical equipment and services they need."

Georgie Blackburn, vice president at Blackburn's, a homecare provider in Pittsburgh, Pa. and a board director at the American Association for Homecare, will testify on behalf of the Association on October 31 before the U.S. House Small Business Subcommittee on Investigations and Oversight.

Blackburn will testify that under the bidding program, "Those who are not selected as winning bidders will not be able to provide competitively bid equipment or services to Medicare beneficiaries. Since Medicare payments typically comprise 35 to 50 percent of a small provider's revenue, losing the ability to provide competitively bid items for a three-year contract period is essentially a death knell."

The Association will point out that the competitive bidding rules designed by the Centers for Medicare and Medicaid Services (CMS) are stacked against the small provider. Smaller homecare providers do not have the economies of scale to negotiate lower prices from manufacturers or the physical size to cover an entire bidding area.

"Even with the small business protections included as part of the program, such as the ability to form networks or the 30 percent set-aside for small businesses, the bidding program will still radically reduce the number of suppliers that exist today."

Preserving Patient Access to homecare and Fair Treatment of Providers

The American Association for Homecare will recommend to the subcommittee changes to the bidding program that are contained in the Durable Medical Equipment Access Act of 2007, H.R. 1845, introduced by Congressmen John Tanner (D-Tenn.) and David Hobson (R-Pa.). The bill, which has 134 cosponsors in the U.S. House of Representatives, changes the bidding program to ensure patient access to home medical equipment and to protect small providers.

Specifically, the Tanner-Hobson bill, H.R. 1845, would:

- Exempt smaller, rural areas from competitive bidding. Congress authorized CMS to exempt metropolitan statistical areas with low populations to ensure that bidding is not implemented in places that lack a sufficient number of providers.

- Allow all homecare providers who meet Medicare participation standards and who submit a bid to continue to provide equipment and services under Medicare at the lower competitively bid rate established by CMS. The Association states that this provision preserves fairness for providers and choices for Medicare beneficiaries.

- Restore providers' rights to administrative and judicial review. Currently, homecare providers have no recourse if CMS makes a mistake in calculating the award reimbursement rate or in awarding a contract. An error can result in the loss of a bid and the loss of a business.

- Exempt Medicare items and services unless savings of at least 10 percent can be demonstrated. The Association believes that CMS should be required to show that the bidding program saves money.

The American Association for Homecare represents providers and manufacturers of durable medical equipment who serve the medical needs of millions of Americans who require oxygen equipment and therapy, mobility assistive technologies, medical supplies, inhalation drug therapy, home infusion, and other home medical equipment, therapies, services, and supplies. Membership includes providers of all sizes that operate approximately 3,000 locations in all 50 states.

http://www.aahomecare.org