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Homecare Associations Nationwide Urge Policymakers to Rescind Controversial Medicare 'Competitive' Bidding Rule
Date:4/13/2009

ce a bureaucratic, anti-competitive price-setting system that would be similar to a closed-model HMO and would have the effect of government-mandated consolidation in the homecare sector.

This is not the solution to Medicare's reform -- and it is certainly not the answer for patients and seniors.

The current structure of the competitive bidding program bears no resemblance to earlier demonstrations. Unlike the 1997-98 demonstrations in Florida and Texas, the current version of the bidding program will put at least 90 percent of providers out of business and will harm Medicare beneficiaries' access to quality home medical equipment and services.

While proponents of this bidding program argue that it will reduce Medicare spending, the inevitable cutbacks in services will result in increased length and cost of hospital stays. Reducing access to quality home medical equipment and services will give many seniors no choice other than to leave their homes for nursing homes or hospitals. The equipment and service for medical oxygen therapy, for example, cost about $8 per day. This is far cheaper than an average daily cost of about $200 for a nursing facility and $5,000 for a hospital stay.

Home medical equipment and care is already the most cost-effective, slowest-growing portion of Medicare spending, increasing only 0.75 percent per year according to the most recent National Health Expenditures data. That compares to more than 6 percent annual growth for Medicare spending overall. DME represents only 1.6 percent of the Medicare budget.

Proponents of the bidding program have also claimed that it will reduce fraud and abuse in the Medicare system, confusing the price-setting mechanism with effective anti-fraud measures. However, long-overdue accreditation requirements for DME finally take effect this year, and surety bond requirements for DME also take effect this year. On top of
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SOURCE American Association for Homecare
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