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Medicare Bidding Program Puts Diabetic Patients in Danger

WASHINGTON, July 11, 2013 /PRNewswire-USNewswire/ -- The American Association for Homecare (AAHomecare) warned today that the controversial Medicare bidding program for diabetic testing supplies is endangering beneficiaries by requiring the use of generic testing strips and monitors that are under scrutiny by physicians and the Food and Drug Administration (FDA) for inaccurate readings.

The Centers for Medicare and Medicaid Services (CMS) has touted that the controversial bidding program will cut the reimbursement rate for diabetic testing supplies by more than 70 percent by delivering the supplies via mail-order. But as the program began on July 1, the FDA and physicians are scurrying to address widespread unreliability among testing materials sold via mail order.

Inaccurate readings can be life threatening to diabetics who self-monitor their glucose levels and administer insulin based on the readings.

This week, Dr. Richard Kahn, a professor of medicine at the University of North Carolina, cited the severity of the issue in an article in RollCall.

"The problem is that just as the Medicare train pulled out of the station, we've discovered a quality issue with diabetes self-monitoring blood glucose systems that will only be exacerbated by competitive bidding," wrote Kahn, who is the former chief scientific and medical officer of the American Diabetes Association. "At a meeting in May, attended by distinguished scientists and Food and Drug Administration representatives, it was openly acknowledged, with much supportive data, that many monitors are not meeting FDA accuracy standards once they're approved and on the market. Almost all of the problems are with low-cost products manufactured overseas."

Moreover, Kahn said there is no FDA surveillance system in place to effectively monitor quality after devices are approved.  "To its credit, the FDA has acknowledged the problem and is working to address it by developing a guidance document for manufacturers and strengthening current standards," he wrote, adding that beneficiaries are assuming that under the CMS bidding program there will be equal quality and accuracy.

"In efforts to reduce the cost of care, we will likely also be reducing the quality of care by providing our nation's diabetics with inaccurate technology," Kahn warned.

"What does this mean for the health of millions of Americans with diabetes on Medicare, many of whom rely on these glucose monitors to keep their diabetes under control? Many of our most vulnerable citizens will assume the test they use is accurate, adjust their insulin dose accordingly, and could unknowingly be putting themselves at risk of hypoglycemia, hospitalization and even death.  I understand and applaud the motivation to reduce costs. But not when there is a clear and present danger for harm—harm that not only will affect health but will likely cause an increase in costs when inaccurate monitoring systems lead to more physician office visits and hospitalizations."

The quality of the new equipment isn't the only problem.  Medicare paperwork requirements are forcing patients to return to their doctors for new prescriptions, which may force patients to bear the cost of another copay.

"Consumers who contact a bid winning provider find out they need to get a new prescription from their doctor for the new provider, which results in delays receiving their testing supplies," said Jeffrey Mignone, senior vice president of operations at Byram Healthcare in White Plains, N.Y. "Due to this delay, I can only assume that some of these consumers will inevitably not test their blood sugar levels, with potentially some impact to our healthcare system. Plus, we are hearing physicians complain about needing to authorize new prescriptions and medical chart notes, and they are not happy about it."

Tyler Wilson, president of AAHomecare, said the problem with diabetic testing is yet another reason why the expansion of the bidding program to 91 new areas on July 1 should be stopped until several critical areas can be addressed.  "Clearly, the mail-order testing supplies are putting the health of Medicare beneficiaries in jeopardy," Wilson said.  "We need to pause the program and address the mounting issues associated with it. There must be confidence that the most vulnerable people in our nation—seniors and people living with disabilities—are receiving the quality care and service that they deserve."

Last month, AAHomecare filed a federal lawsuit asking for a delay in the expansion of the program, saying the bidding program violated its own rules by allowing companies without proper state and local licenses to submit bids and later win contracts to provide goods and services to Medicare beneficiaries.

Under the dangerous and defective bidding program, durable medical equipment (DME) such as oxygen tanks, power wheelchairs, hospital beds, and diabetic testing supplies are provided to Medicare beneficiaries by a small number of contracted companies. But the bidding program has been sharply criticized by Congress, academics, the DME industry, and patient advocates since launching in nine localities in 2011.

One of the major complaints is that the program allows non-binding bids, which means providers can submit unrealistically low bids that are then used to calculate the prices for products and services, but the bidders have no commitment to sign contracts for the amounts of their bids. Yet, these bids are still used in the formula that sets prices.

When CMS announced earlier this year an average 45 percent price cut for most DME items and 72 percent for diabetic testing supplies, many providers were forced to lay off workers, close their businesses, or no longer service Medicare patients. In addition, Medicare beneficiaries report instances where new providers contracted under the initial stage of the bidding program were endangering their health by not providing either the equipment or the level of service they had received previously.

"Byram Healthcare Centers is a national distributor of diabetes testing supplies, but we did not win a contract for them. When Round 2 of the CMS Competitive Bid Program went live on July 1, my company was expecting to see an immediate and significant impact to our business and our customers, and we were not surprised," said Mignone. "My company has had to deal with reducing staff and costs, while consumers and healthcare professionals still call us for help. Customers have reported difficulty connecting to busy providers since there seems to be a shortage of providers who were awarded contracts. We have heard stories of consumers who call providers only to have their current brand of testing supplies immediately switched to alternate products. Some consumers have reported difficulty getting through on Medicare help lines."

Already, a complaint hotline sponsored by People for Quality Care and AAHomecare has received more than 200 calls in the 10 days since the bidding program was expanded to 91 new areas.

One of those calls came from Judy Stephens, 67, of Grisham, Ore.  Stephens is distraught because under the expansion of the bidding program, she is forced to receive mail-order diabetic strips. She also had to use a monitor from the mail-order company because their strips don't work with her old, reliable monitor. Stephens has tested with both monitors, but the generic monitor from the mail-order company repeatedly gives readings 100 to 150 points higher than her original one.

"I can't do this," she pleaded, noting that she adjusts her insulin levels in response to the readings and her health could be endangered by the inaccurate readings. "I don't know what I'm going to do. The readings aren't accurate. My doctor said she has two other patients with the same problem."  

Stephens has a couple of months' supply of strips to use with her original monitor, but doesn't know what will happen when those run out.  She offered a desperate plea to the government, "Please cut back some other way."

The American Association for Homecare represents providers of home medical or durable medical equipment and services who serve the needs of millions of Americans who require prescribed oxygen therapy, wheelchairs, enteral feeding, and other medical equipment, services, and supplies at home. Visit


SOURCE American Association for Homecare
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