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Michigan Home Medical Equipment Providers Back New Congressional Bill to Repeal Flawed Medicare Bidding Program
Date:4/6/2011

LANSING, Mich., April 6, 2011 /PRNewswire-USNewswire/ -- Michigan's providers of home-based care are asking Congress to pass a bipartisan bill to repeal Medicare's "competitive" bidding program for home medical equipment and services.  The controversial bidding program is scheduled to start up later this year in three metropolitan areas in the state – Detroit-Warren-Livonia, Grand Rapids-Wyoming, and Flint.  The program will affect many of Michigan's 1.6 million Medicare beneficiaries.

"I'm glad to see Congress standing up to the federal Centers for Medicare and Medicaid Services," said Robert Binson, who is chairman of the Michigan Independent Providers Association.

"This program, which will put local homecare providers out of business, will limit who Medicare beneficiaries can turn to for service," Binson said. "The program forces patients into longer, more expensive hospital stays, which raises Medicare costs for taxpayers.  It pains me to think that in such a tough economic environment that the government is putting Americans out of work and operating against the best interest of the country's most vulnerable populations."  

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 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 bipartisan bill to repeal the bidding program, H.R. 1041, was introduced in Congress last month by Representatives Glenn Thompson (R-Pa.) and Jason Altmire (D-Pa.).  So far, the legislation has 63 cosponsors in the House of Representatives including Rep. Dale Kildee (D-Mich.).  

Consumer Groups, Market Experts Also Back Repeal Of Bid Program

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; and
  • 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 Michigan Independent Providers Association is an advocacy organization committed to promoting patient access to the highest quality of home health care in a competitive marketplace.  MIPA members are independently-owned firms providing durable medical equipment, home infusion, home health care, and orthotic & prosthetic services. Visit http://www.mipaforchoice.net. The American Association for Homecare is the national association that represents durable medical equipment providers and manufacturers. 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 at home in all 50 states. Visit www.aahomecare.org/competitivebidding.

Michigan Independent Providers Association
120 N. Washington Sq., Suite 110A
Lansing, MI 48933   (517) 371-2223
email admin@mipaforchoice.net


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SOURCE Michigan Independent Providers Association
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