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Delay of Medicare Bidding Program for Home Medical Equipment Underscores Severe Problems with Program; Support Surges for Bipartisan Bill to Repeal the Bid Program

WASHINGTON, May 4, 2011 /PRNewswire-USNewswire/ -- The delay in round two of Medicare's controversial "competitive" bidding program for home medical equipment and services underscores that program's severe design flaws. Opposition to the program continues to build among patient and consumer groups and among members of Congress where one fifth of the House of Representatives has gone on record favoring repeal of the program.

"The federal government's announcement last month about the delayed timeline for implementation of a second round of bidding is the clearest signal yet that there are failings built right into the bidding system," said Tyler J. Wilson, president of the American Association for Homecare.

The bidding program will affect millions of Medicare beneficiaries nationwide who require oxygen therapy, enteral nutrients (tube feeding), continuous positive air pressure (CPAP) and respiratory assistive devices, power wheelchairs, walkers, hospital beds and support surfaces, and mail-order diabetic supplies.  

As designed by the federal agency that runs Medicare, the Centers for Medicare and Medicaid Services (CMS), the Medicare bidding program severely and arbitrarily restricts the number of companies that are allowed to provide those types of home medical equipment and services that are subject to bidding.  As 167 economists and auction experts noted in a letter to Congress last year, the bidding system is deeply flawed and will produce unsustainable pricing and a "race to the bottom" in terms of healthcare.

In March, 2011, Congressmen Glenn Thompson (R-Pa.) and Jason Altmire (D-Pa.) introduced H.R. 1041, a bipartisan bill in the U.S. House of Representatives that would repeal this bidding program.  So far that bill has 88 cosponsors – one out of five Representatives – with broad support from both Republicans and Democrats.

Rep. Thompson stated, "Auction and bidding experts have resoundingly agreed that the program does not work. Delaying round two only kicks the can to a future date. While this is an indication that the Fairness in Medicare Bidding Act (H.R. 1041) is gaining momentum, we must continue efforts to educate policy makers here in Washington about the disastrous affects this program will have on our communities and Medicare beneficiaries."

"CMS's decision to delay round two of the competitive bidding program shows that even it acknowledges that this program is seriously flawed," said Rep. Altmire. "The truth is that no matter how CMS tries to tweak its competitive bidding program, it will continue to be a fundamentally bad deal for our nation's seniors and small businesses. I will continue working in Congress to repeal this program and protect seniors' access to the quality care that they deserve."

More than two dozen patient advocacy and consumer groups also have endorsed H.R. 1041. Those organizations include the ALS Association, the Brain Injury Association of America, the Christopher and Dana Reeve Foundation, the International Ventilator Users Network, the Muscular Dystrophy Association, National Emphysema and COPD Association, the National Council on Independent Living, the National Spinal Cord Injury Association, and United Spinal Association, among others.

In January 2011, round one of the bid program was implemented in nine metropolitan areas – Charlotte, Cincinnati, Cleveland, Dallas-Fort Worth, Kansas City, Miami, Orlando, Pittsburgh, and Riverside, California. Since then, patients, clinicians, and homecare providers have reported:

  • Difficulty finding a local equipment or service provider;
  • Delays in obtaining medically required equipment and services;
  • Longer than necessary hospital stays due to trouble discharging patients to home-based care;
  • Far fewer choices for patients when selecting equipment or providers;
  • Reduced quality; and
  • Confusing or incorrect information provided by Medicare.

CMS has revised the implementation timeline for round two of the bidding program, which targets an additional 91 metropolitan statistical areas, and says it will announce contract winners for the 91 areas in Spring 2013 for implementation in Summer 2013.  

"We have said for a long time that competitive bidding will not work for Medicare patients or businesses," said Tyler Wilson. "Home-based care is the most cost-effective setting for post-acute care and long-term care, yet Congress has been cutting reimbursement rates for home medical equipment and services for more than a decade even though it represents less than 1.5 percent of Medicare spending. Medicare spending in this sector is declining.  This bidding program is merely a solution in search of a problem."  

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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