A Good Idea Gone Bad

by Allan Friedman, CFILC's Technologies Manager


Competitive bidding sounds like a good idea, right? Get the lowest price and the best deal. Save money. What could go wrong?


Plenty, especially when it's Medicare running the process and durable medical equipment (DME) vendors doing the bidding. The Centers for Medicare and Medicaid Services (CMS) Competitive Bidding Program for certain Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) is causing havoc in the home healthcare industry.


The Medicare Modernization act of 2003 (MMA) required Medicare to replace the Home Medical Equipment (HME) payment fee schedule for certain items with a "competitive acquisition" or government contracting program. The program was implemented on January 1, 2011 in nine cities (including the Riverside/Bakersfield area) and will expand to 91 metropolitan areas later this year in round 2.


In California, round 2 cities include: Bakersfield, Fresno, LA-Long Beach-Santa Ana, Sacramento-Roseville, San Diego-Carlsbad-San Marco, SF-Oakland-Fremont, San Jose-Sunnyvale-Santa Clara and Visalia-Porterville.


So what's wrong with the competitive bidding program? Well, for starters it is driving suppliers out of business, limiting choice for consumers, lengthening hospital stays and causing much grief for consumers.


As a result of the bidding process, many vendors who provide a variety of home healthcare products and DME were awarded contracts to supply a single item or none at all. In some areas, out-of-state vendors won contracts to supply products, forcing consumers to drive long distances or rely on mail order to obtain supplies and products they previously purchased locally.


Hospital discharge planners are delaying releases because they cannot match patients to contracted providers with the appropriate products such as wheelchairs, oxygen equipment and sleep therapy devices.


One Medicare recipient was waiting for her diabetes test strips for more than two weeks and could no longer receive them from her original provider since the company was not contracted. Another patient needs oxygen 24 hours a day and relies on portable oxygen to visit her physician. Her HME company did not win a contract and the user needs physician approval to switch to a different company. She has no access to oxygen and cannot visit her physician.


So what can we do? For starters, Consumers in the Riverside-San Bernardino area who have been affected by this program need to tell their stories. At the AAHomecare’s website (http://www.aahomecare.org/) They can click on the ‘Competitive Bid Problems?’ button and provide feedback on how their access to home healthcare products and services has been affected by the program.


We also need to get behind HR 1041 and urge its passage before the program expands to round 2 later this year. HR 1041 would roll back the flawed pilot project and institute an up-to-date and fair pricing schedule defining what Medicare will pay for certain equipment. The bill has 132 cosigners, none from California. Advocates, consumers and others who are concerned, should write their representatives in Congress and urge them to cosign the bill.


A lot of Californians are already experiencing difficulties as a result of this program. Many more will unless we join the national effort to stop it. The time to advocate is now!