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Montana Medical Equipment Providers Back New Congressional Bill to Repeal Flawed Medicare Bidding Program

HELENA, Mont., April 12, 2011 /PRNewswire-USNewswire/ -- The association representing Montana's providers of home medical equipment and services supports a new, bipartisan bill in Congress to repeal the controversial Medicare "competitive" bidding program for home medical equipment and services.  

"It is imperative that H.R. 1041 pass if we are to maintain the health of both Medicare patients and local businesses in Montana," said Mike Calcaterra, Montana state chairman and legislative chair for the Big Sky Association of Home Medical Equipment Suppliers. "We are already seeing local Montana suppliers exit markets and close their shops due to competitive bidding, which hasn't even been implemented in the state yet, and other changes made to the Medicare and Medicaid system. If this continues, we are going to see more problems occur as patients will face disruptions in services that will affect their health."        

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.

"Medicare officials have not listened to homecare providers. They implemented this bidding program against not only our advice but against the advice of patient advocacy groups and economists and experts who specialize in auction markets who believe this program is fatally flawed," said Calcaterra. "If Congress does not pass this bill, the bidding program will continue to harm the health of America's most vulnerable populations, put hard working Americans out of jobs in this difficult economy, and it will drive up healthcare costs as seniors will be forced to endure costly hospital visits and nursing home stays to address health care needs that could easily be taken care of at home."

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 74 cosponsors in the House of Representatives.  


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, 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."

Big Sky Association of Home Medical Equipment Suppliers is dedicated to promoting ethical and professional home medical services to the patients of Idaho and Montana. Members adhere to strict professional practices to provide the highest quality services available. 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. Visit  

SOURCE Big Sky Association of Home Medical Equipment Suppliers
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