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Massachusetts Home Medical Equipment Providers Back Federal Legislation to Repeal Controversial Medicare Bidding Program

BOSTON, May 16, 2011 /PRNewswire-USNewswire/ -- Massachusetts providers of home medical equipment and services (HME) support H.R. 1041, a bipartisan bill in Congress to repeal the flawed, controversial Medicare "competitive" bidding program for medically required equipment and services.  

"Massachusetts' medical suppliers need H.R. 1041. If this bill is not passed, it will harm our businesses and hurt the state's more than one million Medicare beneficiaries," said Gary Sheehan President of Cape Medical Supply, Inc. "Massachusetts homecare providers are watching Medicare's competitive bidding program put our colleagues out of businesses in other states, and we know that many of us are next if the program comes to Massachusetts. By eliminating providers, Medicare is eliminating access to care for patients. This will cause an increase in medical issues and problems – ones that could and normally would have been avoided."  

The bidding program affects 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.  The program was implemented on January 1 in nine metropolitan areas and it begins in an additional 91 areas later this year. The first nine areas are Charlotte, Cincinnati, Cleveland, Dallas-Fort Worth, Kansas City, Miami, Orlando, Pittsburgh, and Riverside, California.

The bill to repeal the bidding program, H.R. 1041, has 98 cosponsors so far in the House of Representatives with broad support from both Republicans and Democrats, including Massachusetts Reps. John Tierney and James McGovern.


A number of patient advocacy and consumer groups also support H.R. 1041 including 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.  

The legislation to repeal the bidding program was introduced after hundreds of patients and providers reported problems with the program since its January 1 implementation.  By design, the bidding program severely restricts the number of companies that are allowed to provide the equipment and services subject to bidding.  Since the bidding program began on January 1, 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.

In January, the American Association for Homecare shared with Medicare a number of problems and concerns related to the bidding program including:

  • Medicare awarded contracts to companies that are bankrupt.
  • Medicare awarded contracts to companies that are not licensed to provide the specific medical items or services.  
  • Medicare awarded contracts to companies with serious credit problems.
  • Medicare distributed incorrect information about the contract winners.

In a November, 2010 letter, 167 leading economists and auction experts, including two Nobel laureates, warned Congress that Medicare's bidding design for medical equipment will fail. Those experts found that the bidding program designed by the Centers for Medicare and Medicaid Services (CMS) has irreparable flaws that will prevent it from achieving its objectives of low cost and high quality equipment and services. Under the CMS-designed system, the bidding companies are not bound by their bids, which undermines the credibility of the process and encourages "low-ball" bids that create an unsustainable process and threaten the long-term viability of the program.  

Ultimately, the experts told Congress, the bid design provides "strong incentives to distort bids away from [actual] costs," and lacks transparency, which is "unacceptable in a government auction and is in sharp contrast to well-run government auctions." The experts' letters conclude, "This collection of problems suggests that the program over time may degenerate into a 'race to the bottom' in which suppliers become increasingly unreliable, product and service quality deteriorates, and supply shortages become common. Contract enforcement would become increasingly difficult and fraud and abuse would grow… Implementation of the current design will result in a failed government program."

The New England Medical Equipment Dealers Association is the regional trade association representing providers of home medical equipment and supplies, home oxygen therapy and respiratory equipment, custom wheelchairs and assistive technology, and home infusion therapy in the six New England states. Approximately 80% of Medicare and Medicaid beneficiaries receive their home medical equipment and related services from a NEMED member. Visit

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 New England Medical Equipment Dealers Association
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