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Homecare Provider Testifies on Downside of Medicare 'Competitive' Bidding Program Before House Energy and Commerce Subcommittee
Date:9/15/2010

er emergency or disaster.  

With respect to all of the promised savings and advantages of the "competitive" bidding program, I maintain that what sounds too good to be true, is too good to be true.  This ill-conceived program will single-handedly destroy the home medical services sector, harm the patients we serve and ultimately increase Medicare costs.

History of the HME Competitive Bidding Program

The problems associated with the first round of bidding in 2008 ultimately led Congress to delay the program in order for CMS to address the significant flaws.  

Unfortunately, CMS failed to make the necessary, substantive changes to address the problems.  They did not change how the single payment amount was determined nor did they listen to industry experts on how many homecare providers were necessary to service the patient population. During the recent new bidding for Round One we found:  

  • A provider in Ohio was offered a contract for a respiratory device but does not have a licensed respiratory therapist on staff, contrary to the bidding rules and contrary to Ohio law.
  • One of the largest homecare companies announced in July 2010 that it was offered 17 contracts in the first round despite the fact that in June 2010 it had $513 million in long-term debt outstanding, was considering restructuring or filing for bankruptcy and expects to lose up to $900,000 in the bidding areas in the first quarter of 2011.
  • Medicare officials said that during the bid evaluation, they did not trust the financial information submitted by providers 30 percent of the time.  In these cases CMS adjusted the provider's capacity to serve the marketplace.  CMS established rules but did not play by those rules when it saw fit.  These actions could have lowered the accepted single payment amount.

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SOURCE American Association for Homecare
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