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Medicare Bidding Program Creates Major Problems for Physicians, Hospitals, and Beneficiaries Seeking Home Medical Equipment

Physicians Cite Patient Concerns about Delays in Oxygen Orders, Lack of Trained Technicians

ARLINGTON, Va., July 8 /PRNewswire-USNewswire/ -- The new Medicare competitive bidding program for durable medical equipment has created concern and chaos for beneficiaries, physicians, hospital discharge officials, and home medical equipment providers across the country since it was implemented in 10 metropolitan areas on July 1.

The bidding program has triggered widespread disruptions in service to beneficiaries who require oxygen therapy, power wheelchairs, CPAPs, diabetic supplies, and other items and services that help them live healthy, independent lives. The controversial bidding program is operating in Charlotte, Cincinnati, Cleveland, Dallas-Ft. Worth, Kansas City, Miami, Orlando, Pittsburgh, Riverside, Calif., and San Juan, P.R.

Mounting complaints have been made to the American Association for Homecare (AAHomecare) about the bidding program, including delays in patients being discharged from hospitals because proper equipment cannot be obtained in a timely manner for their use in their homes; Medicare beneficiaries calling their previous providers frustrated because they cannot find new providers to deliver equipment they need; and providers making referrals for their previous patients but finding that providers who won bids are unwilling or unable to service the patients' needs.

"It's imperative that the Senate move as quickly as possible to impose a moratorium in the program so that critical reforms to the program can occur," said Tyler J. Wilson, President and CEO of AAHomecare. "We are facing a potentially dangerous situation in which some of the most vulnerable people in our society are having difficulty getting the medical equipment that they need. Those who are in hospitals are being forced into longer stays in those expensive institutions because equipment can't be obtained in a timely manner to sustain them in their homes. This is a dire situation that must be corrected."

Wilson said the situation underscores the urgency for the Senate to approve legislation that would correct problems in the bidding program and delay its implementation for at least 18 months. The Senate is expected to vote on the Medicare bill that contains the reforms to the bidding program, H.R. 6331, as early as Wednesday. The House has already approved the legislation by an overwhelming 355 to 59 margin, with strong bipartisan support. The measure is supported by AAHomecare, as well as the ALS Association, the Muscular Dystrophy Association, the National Spinal Cord Injury Association, the Paralyzed Veterans of America, and the United Spinal Association, among others.

Unless improved, the bidding program will eliminate thousands of qualified providers from Medicare and reduce services and access to care for Medicare beneficiaries. Wilson noted that providers, as well as consumer advocates and other stakeholders have argued that the Centers for Medicare & Medicaid Services (CMS) were implementing a flawed bidding program that would put Medicare beneficiaries at risk, while failing to deliver on promises that it would increase competition and lower price over the long haul. Two recent economic studies predicted the program would fail to deliver on its promises.

Meanwhile, physicians, such as Dr. Natarajan Rajagopalan, M.D., who is chief of staff at a hospital in Miami-Dade County, are concerned about the consequences for patients. On July 2, Dr. Rajagopalan's hospital placed an order for liquid oxygen for a patient on a high liter flow. Such equipment, he says, is usually delivered by a licensed respiratory therapist, who reports back to the discharging pulmonologist or critical care physician. "We found that none of the companies we called carry liquid oxygen systems," he said. "I found out that with the goal of finding the lowest bidder companies can sub-contract specialized oxygen services through un-accredited companies. They are not required to have the equipment set-up by or have the patient trained or evaluated by a respiratory therapist."

In a letter to Sen. Mel Martinez (R-Fla.) asking that he support the legislation to reform and suspend the bidding program, Dr. Rajagopalan said that in another case, his office manager placed a call with a bid winner before noon last Thursday for oxygen equipment. She was told that the equipment could be delivered either the next day, or the day after.

"Typically oxygen is delivered to a patient in hours not days," Dr. Rajagopalan wrote. "That policy will create countless problems for our hospital and the other hospitals in the area. We cannot wait days for equipment to be delivered to the hospital or to the patient's home before they are discharged. The hospital needs the patient's room and we are unable to bill Medicare additional days for a hospital stay."

Furthermore, Dr. Rajagopalan wrote, "In the past local providers competed for our business by working with case mangers to help us with these sensitive issues. Today the lowest bid is costing the hospital in the form of increased hours by case managers, juggling multiple bid winners trying to coordinate the discharge of a single patient. If a patient requires a hospital bed, walker, enteral tube feeding, therapeutic ventilation and oxygen case managers may have to coordinate with 5 separate bid winners to get the patient home."

Another physician, Dr. Seth Gottlieb, of Miami, is also upset at the new process. Last week, he wrote a letter to Sen. Martinez, saying, " The competitive bidding program in home medical equipment is only a few days old and it has already caused major delays and problems for my staff and the discharge coordinators at the Mount Sinai Medical Center in Miami Beach."

In his letter, Dr. Gottlieb noted that nine of the oxygen providers that won bids in the area do not have the necessary licenses from the State Department of Health, and that there are no oxygen providers located on Miami Beach or at least within a 10 mile radius. "This means that if a patient is discharged and requires a hospital bed and oxygen, the discharge planner must now order the hospital bed from one company and the oxygen from another company," he wrote. "This will increase the work for my staff and the hospital discharge planner and will result in a delay in the patients' discharge which will ultimately cost Medicare more in the long run."

Marcie Roth, Executive Director and Chief Executive Officer of the National Spinal Cord Injury Association maintained that similar problems have surfaced in other cities where the bidding program is being used.

"How can the government be pursuing a process that allows unlicensed and untrained people to distribute oxygen, other life-preserving medical equipment and service and care for people living with paralysis and complex conditions such as amyotrophic lateral sclerosis (ALS), muscular dystrophy or spinal cord injuries?" Roth said. "This bidding program needs to be suspended before these technical problems turn into human tragedies."

Regarding the competitive bidding program, Jerry Lewis, National Chairman of the Muscular Dystrophy Association said that Congress faces an imminent choice that will affect a large portion of the people with severe disabilities who depend on customized equipment for their quality of life.

"If a new Medicare program that requires competitive bidding for durable medical equipment goes forward without exempting complex power wheelchairs and rehab devices, thousands of Medicare beneficiaries with muscular dystrophy, Lou Gehrig's disease and other neuromuscular and spinal disorders will be forced to use 'one-size-fits-all' wheelchairs that can cause pressure sores, reduced mobility and injury." Lewis added that implementation of the competitive bidding program is "a misguided attempt to save a few dollars at the expense of society's most vulnerable citizens."

The American Association for Homecare represents durable medical equipment providers, manufacturers, and other organizations in the homecare community. Members 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 medical equipment and services in their homes. The Association's members operate more than 3,000 homecare locations in all 50 states. Visit

SOURCE American Association for Homecare
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