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Problems Emerge in Competitive Bidding Pricing Scheme for Home Medical Equipment; Economists Predict the Program Will Fail
Date:12/16/2010

WASHINGTON, Dec. 16, 2010 /PRNewswire-USNewswire/ -- Unsustainable Medicare reimbursement rates for home medical equipment and services (HME) and a sharp reduction in HME providers will occur as a result of Medicare's bidding program going into effect on January 1, 2011 in nine of the largest metropolitan areas in the U.S.

Those areas include Charlotte, Cincinnati, Cleveland, Dallas-Fort Worth, Kansas City, Miami, Orlando, Pittsburgh, and Riverside, California. The bidding process starts in another 91 areas throughout the U.S. in 2011.  The bidding system affects providers and consumers of home or durable medical equipment and services such as oxygen therapy, respiratory devices, hospital beds, wheelchairs, and other medically required equipment and supplies needed by seniors and people with disabilities in Medicare.

In recent weeks since the announcement of the "winning" bidders, a number of problems have already been reported in the initial nine areas, including:

  • Winners of contracts that are bankrupt;
  • Errors on the Medicare.gov website providing misinformation to beneficiaries;
  • Incorrect materials sent to beneficiaries outside of bidding areas instructing them to switch providers;
  • Lack of required state licensure among some bid winners; and
  • Credit problems among a significant percentage of the bid winners.

The continuing steep reductions in reimbursement rates for providers of home medical equipment and services will make it even harder for the typical community-based, family-owned homecare provider to remain in business providing the level of service and care that allows seniors and people with disabilities to remain safe and independent at home.

This bidding system will ultimately result in a sharp reduction in consumer choices as well as thousands of artificially triggered small business failures and lost jobs.

Economists War
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SOURCE American Association for Homecare
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