Provision In Medicare Bill To Delay DME Competitive Bidding Program

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The New York Times on Wednesday published an editorial and column that addressed a provision included in a Medicare bill (HR 6331) passed by the House that would delay for 18 months a competitive bidding program for durable medical equipment. Under the program, which is scheduled to begin July 1, CMS will select DME suppliers to participate in Medicare based on bids they submit. The2003 Medicare law mandated the program as part of a larger effort to implement competitive bidding. In 2008, the program will operate in 10 of the largestMetropolitan Statistical Areas and will apply to 10 of the top DME, prosthetics,orthotics and supplies product categories. In 2009, the program will expand toan additional 70 MSAs and will continue to expand in future years. The programalso will apply to additional product categories in future years. The programlikely will result in an average 26% decrease in the prices of medicalequipment in the 10 MSAs, according to CMS (KaiserDaily Health Policy Report, 6/10). Summaries of the editorialand column appear below.

  • Times: The Senate should "resist the delay" of the program, which "is a smart way to help Medicare control equipment costs at a time when all medical costs are soaring and there is a relentless pressure to reduce Medicare's services or raise charges to beneficiaries," a Times editorial states. The passage of the delay by the House "inevitably makes one wonder if major reform will ever be possible in a medical marketplace dominated by imperfect government bureaucracies and private lobbyists bent on resisting government reforms." According to the editorial, concerns about the program raised by some medical equipment companies whose bids were disqualified "sound like sour grapes from companies whose prices were too high to compete," and concerns from patient advocacy groups that the program would reduce the quality of services for Medicare beneficiaries "seem overblown and should be easily addressed." The editorial states, "Congress must ensure that any delay it imposes does not become a prelude to junking the program for good," adding, "There is never a good reason for Medicare to pay far more than the market rate for medical equipment," and "certainly not in times like these" (New York Times, 6/25).
  • David Leonhardt, Times: The passage of the delay of the program by the House provides a "great example of how a small group of constituents can potentially beat back a policy that's clearly in the public interest but has no similarly committed group of supporters," and the "current fight to protect those profits is a microcosm of what you can expect to see if a larger effort to rein in health costs ever gets going," Times columnist Leonhardt writes. According to Leonhardt, the program " could ultimately save Medicare $1 billion a year and patients $200 million or so in co-payments," as Congress in the past has established payments for medical equipment "well above the market rate, effectively handing out a few hundred million dollars of corporate welfare every year to the equipment makers." He adds that concerns about the program raised by some medical equipment companies amount to an effort to "keep the billion-dollar subsidy that they're receiving every year," or "at least as much of it as possible." Medical equipment "is a case in which the market can clearly do a better job than a government-mandated fee schedule," Leonhardt writes, adding, "By standing in the way of this competition, Congress is really standing up for higher health care costs" (Leonhardt, New York Times, 6/25).

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign upfor email delivery at kaisernetwork.org/email . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J.Kaiser Family Foundation.

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Comments

As a consultant to a mid-sized DME company, I have seen the result of competitive bidding so far. First many companies were denied their bids ever being seen because of clerical errors such as missing documentation. Its funny how their lawyers who submitted the bid had a copy of the missing paperwork in their copy. Also, many of the "low" bidders have absolutely NO EXPERIENCE in the areas the won bids on. I don't know about the rest of the country but when it comes to my health care, service trumps price every time. I would much rather my oxygen machine be serviced by a company that understands how they work. Medicare is trying to "low-ball" health care for our most susceptible portion of the population. Of course this will not be Medicare's problem since all of the deaths related to poor service will be blamed on the companies that won the bids and not Medicare itself. Oh, and by the way many family owned DME companies who could not survive the bid process have already gone out of business. Another "joy" to this whole situation is that if a doctor orders a hospital bed and a wheelchair for a patient, it is likely the patient will have to get them from two different suppliers since their regular supplier may not have won the bid for one or both. I hope this situation is resolved soon because in the meantime doctors and patients don't know what to do, Medicare is may hold up payments to suppliers and more DME companies will go out of business daily until Congress and the President resolve their differences. Eric Anthony EAG IT & Business Consulting [email protected]com