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Senate Finance Committee Addresses Problem-Plagued Medicare Bidding Program in SGR Bill

WASHINGTON, Dec. 13, 2013 /PRNewswire-USNewswire/ -- The Senate Finance Committee has marked up a sustainable growth rate (SGR) reform bill that included an amendment designed to fix significant problems with Medicare's bidding procurement program for home medical equipment (HME), says the American Association for Homecare.

The amendment to the bill, also known as the "doc fix," was offered and supported by a bi-partisan group of four Senators including Ben Cardin (D-Md.), Bob Casey (D-Pa.), Rob Portman (R-Ohio), and Debbie Stabenow (D-Mich.).

"I was able to work with several of my colleagues on both sides of the aisle today on a crucial change that ensures that seniors continue to have access to quality durable medical equipment," said Sen. Rob Portman (R-Ohio) in his opening statement. "This proposal contains language that would require companies to prove that they have appropriate state licensure before they're able to become durable medical equipment suppliers in that state. This is a critical protection that was lacking in the current bidding system."

This is the first time in since 2008's Medicare Improvements for Patients and Providers Act that the Senate has taken action to fix the controversial bidding program. The move is clear acknowledgment of the deep flaws that continue to plague the program.

Support to replace the program, which is essentially a government price-setting scheme, with one based on fair and open competition, has grown steadily. There are now 164 cosponsors on H.R. 1717, the Medicare DMEPOS Market Pricing Program Act of 2013. Representatives from both parties recognize that the Centers for Medicare & Medicaid Services has placed an unacceptable burden on the elderly and disabled by effectively limiting their access to doctor-prescribed medical equipment.

"The best chance we have of relieving the tremendous burden the badly mismanaged Medicare bidding program has put on patients is to develop fixes based on a real marketplace solution," said AAHomecare President Tom Ryan. "We'll continue to work closely with the House and Senate to make sure that happens."

As currently designed, the troubled bidding program has been dismissed by auction experts for choosing suppliers "based on their willingness to game the system rather than their cost competitiveness." Non-binding bids, median bids rather than clearing bids used to set prices, supplier capacity randomly assigned by the Department of Health & Human Services, and lack of transparency at every stage of the process contribute to the consensus that Medicare's program is "built to fail."

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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