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Medicare Bidding Program for Durable Medical Equipment May Harm Small Businesses and Decrease Patient Access to Care, Say 137 Members of Congress
Date:3/19/2008

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This month, CMS is expected to award the first round of competitive bidding contracts, based on a provider's ability to cut prices, in 10 metropolitan statistical areas. Those 10 areas include: Charlotte, N.C.; Cincinnati, Ohio; Cleveland, Ohio; Dallas-Fort Worth, Texas; Kansas City, Mo.; Miami-Fort Lauderdale, Fla.; Riverside-San Bernardino, Calif.; Orlando, Fla; Pittsburgh, Pa.; and San Juan, P.R.

Because of the design of the bidding program, thousands of DME providers throughout the U.S. will not receive contracts and will lose their ability to serve Medicare patients who require medical equipment and services subject to bidding. This loss of business may force thousands of small providers to close, thus jeopardizing patients' ability to continue receiving quality service in their homes. CMS estimates that approximately 85 percent of registered providers qualify as small businesses.

The Weeks Group, a business consulting firm in Melbourne, Fla., conservatively estimates that a minimum of 14,000 full-time equivalent jobs will be lost in the durable medical equipment sector when the first two rounds of the bidding program are implemented in the first 80 metropolitan areas throughout the U.S.

Moreover, a study published earlier this year in the Southern Economic Journal analyzed the CMS demonstration projects on which the bidding program is based and concluded that, "the CMS format will likely result in an insufficient supply of medical equipment, increased prices on a number of goods, and potential problems for beneficiaries in obtaining equipment." The study authors, Brett Katzman, Ph.D. of Kennesaw State University and Kerry Anne McGeary, Ph.D. of Drexel University, "strongly urge a restructuring of the bidding process." Similar conclusions were reached by two economists at Robert Morris University, Brian O'Roark, Ph.D. and Stephen Foreman, Ph.D., who performed a recent study that concluded, "the proposed
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SOURCE American Association for Homecare
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