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Medicare Bidding Program Endangers Patients, Costs Jobs in Pittsburgh, says American Association for Homecare
Date:4/4/2012

When Blackburn's didn't win bids for certain Medicare-covered products, customers began purchasing other supplies and equipment – orders that had previously gone to Blackburn's – from the companies that were now providing the Medicare products.

"It made things easier for the discharge planners to limit the places they called since they were precluded from calling providers of their choice," says Blackburn. "But it was lost revenue for our company and something we had not anticipated."

Blackburn says it is particularly "galling" when out of state providers win bids for services and equipment in the Pittsburgh area, but don't have the skills or capacity to provide the service or products for Medicare beneficiaries. What happens?  These bid winners contact Pittsburgh area providers offering subcontracting deals to supply the same equipment to patients who had previously been serviced by the locals. But now the local providers are asked to perform the services and products, sometimes to former customers, at drastically lower prices.  

"We were contacted to become a subcontractor by several companies, but it did not make sense to us to support the bid program through subcontracting," says Blackburn. "We had fought the program since 2007 and worked closely with our congressmen to stop it. We continue to push for an alternative, market-based pricing system, while trying to move our company forward under the current program."

It has been a challenge.

"We decided that we wouldn't lay off people or sacrifice patient service," Blackburn says. "Last year, we reduced the percentage of contribution made to 401K accounts and shareholders recently reduced quarterly dividends. But other companies in the state actually reduced staff when they won multiple contracts in the bidding process."

By contrast, Klingensmith HealthCare located 40 miles north of Pittsburgh has had a difference experience with the biddin
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SOURCE American Association for Homecare
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