Outsiders criticize competitive bidding...

Experts continue speaking out against bidding program

Prof. Cramton sends letter to Obama, think tank releases study

06.17.2011

WASHINGTON - Criticism of Medicare's competitive bidding program continues to mount--much of it coming from outside the HME industry. On Thursday, Dr. Peter Cramton, a vocal critic of the program, and 244 economists, computer scientists and engineers sent a letter to President Obama, expressing concerns with the program. The letter states: "In September 2010, many of us signed a letter to Congressional leaders pointing out the numerous fatal flaws in the current Medicare competitive bidding program for durable medical equipment (DME). We also emphasized that the flaws could easily be fixed by adopting modern auction methods that have been developed over the last fifteen years and are now well-understood." "There are to date no signs that CMS has responded to the professional opinions of auction experts or taken any serious steps to fix the obvious flaws to the competitive bidding program. Rather CMS continues to recite the mantra that all is well and that CMS does not plan to make any changes to the program as it expands from nine pilots to the entire United States." Read the entire letter. Also last week, another study found fault with Medicare's competitive bidding program. The San Francisco-based Pacific Research Institute, a non-profit organization which supports free-market policy solutions, released "Durable Medical Equipment: Price Suppression and Research and Development Investment" on June 13. The way the bidding program is designed creates prices that are "substantially lower than those that would emerge in a competitive market," stated the study' author, Benjamin Zycher, a PRI senior policy fellow. Such artificially low prices will have an adverse impact on investment in research and the development of new medical technologies, according to the report. Investment would be reduced by 12% to 15% or approximately $2.1 billion $3.1 billion annually from 2011 through 2020. "This investment loss would cause, conservatively, a loss of about 500,000 expected life-years each year, the economic cost of which would be about $50 billion per year, which is substantially greater than the entire U.S. market for medical devices and equipment," stated Dr. Zycher. To see the report: www.pacificresearch.org. Meanwhile, H.R. 1041, the bill to repeal the bidding program, continues to gain support. Last week, it picked up nine new co-sponsors, bringing the total to 125.

Medicare coverage of medical equipment

Medicare will cover certain types of medical equipment if it is:

• Able to withstand repeated use;
• Primarily and customarily used to serve a medical purpose;
• Generally not useful to a person in the absence of an illness or injury; and
• Appropriate for use in the home and
• Provided by specific suppliers that are approved by Medicare.

Some examples of this equipment are walkers, wheelchairs, power scooters, hospital beds, home oxygen equipment, diabetes self-testing equipment (and supplies) and certain nebulizers and their medications (non-disposable).

Sometimes, durable medical equipment is referred to as DMEPOS because Medicare also covers: prosthetics, orthotics and certain supplies (POS). Prosthetics are devices that can replace a missing body part, such as a hand or leg. Orthotics are equipment like braces that help to support or correct the malfunction of a limb or torso.

In most cases, Medicare does not cover medical supplies that generally are used and then thrown away.

An exception to this is that covers some medical supplies, like lancets and test strips for diabetes. Note: Some diabetes supplies are also covered under Part D.

Another exception is that if you qualify for Medicare home health, Medicare may cover certain disposable supplies, such as intravenous supplies, gauze or catheters.

To find out what items are NOT considered DME, click on the link in the GO TO box.

Medicare coverage of DME items can vary by state. For a specific question about Medicare coverage of DME, you can call your local durable medical equipment administrator. This is called the DME MAC, you can find the number of your local DME MACby calling 1-800-MEDICARE.

Starting January 1, 2011, in certain states Medicare will usually only cover certain durable medical equipment if you purchase it from a contract supplier. Contract suppliers are suppliers that have contracts with Medicare to provide certain DME in specific regions within the following states. The states are CA, FL, IN, KS, KY, MO, NC, OH, PA, SC and TX.

To find out more about your contract supplier, call Alpine at (801) 463-0044.

To find out what DME Medicare covers in your area, call 800-Medicare.

'You are still persevering'

'You are still persevering'

Other buzzwords at Heartland Conference: competitive bidding, audits, technology

By Theresa Flaherty Managing Editor

WATERLOO, Iowa – For HME providers who feel as though every workday is a battle, the keynote speaker at The VGM Group's Heartland Conference last week put things into perspective. "In Mogadishu, if you get up in the morning, call it a win in pencil, because you've still got the rest of the day (to get through)," Sgt. Matthew Eversmann told attendees. Eversmann rece ived a Bronze Star for his service in Somalia, where he was involved in the 18-hour Battle of Mogadishu. That experience was the basis for the movie "Black Hawk Down." While the everyday battles fought by HME providers aren't quite so dramatic, they are challenging, he acknowledged. "You provide services to so many people, with all these challenges, and you are still persevering," said Eversmann. This year marked the 10th anniversary of the Heartland Conference. The event, held June 6 to 9, drew more than 1,000 participants. A few highlights from the educational sessions: Talk about the patient During a "Town Hall Meeting," Rep. Tom Latham, R-Iowa, told providers they need to push patients to the center of the debate if lawmakers are to understand why Medicare's competitive bidding program should be repealed. "You are the experts, make your case," he said. "Frame it in way so that it's about their constituents. It's good to reduce spending in Washington, but let's do it in a way that doesn’t hurt people." Speak up about documentation Providers are living in an "audit world" right now, and it's no longer good enough to show that the physician says a patient needs equipment. What Medicare wants to see is documented proof of continued need and use of equipment, said speaker James Herren of James Herren Consulting Services, during his session, "Understanding Medical Management for DME Audits.” "Medicare has swung toward documentation," said Herren. "If it isn't documented, it isn't necessary. That's where medical management comes in. The doctor's notes determine everything." It's up to providers to make sure those notes are complete—and to ask for them. "There's no reason not to ask for that documentation," he said. "It's your equipment and you have a right to ask to make sure you will be paid. Make it part of your business model." Be tech-savvy Technology also needs to be part of providers' business models. New federal regulations are shifting the healthcare industry, as a whole, toward adoption of electronic health care records, and policy and reimbursement changes are pushing HME providers to become more efficient, said speaker Chris Watson, chief marketing officer for Brightree, during her session "Prospering in Post-Reform World: Is Your Business Ready?" "Have you talked to referral sources about technology?" she asked. "They are getting pressure to adopt technology to provide better quality care at a lower cost." Don't assume your patients aren't using technology, either, said Watson. "Look at the way they are interacting with their families," she said. "They are using e-mails and texting because that's how they communicate with their children and grandchildren."

'We all must work together to encourage our Representatives to take a stand'...

By Jay Broadbent, owner of Alpine Home Medical

I entered the homecare community 16 years ago because I was drawn to what the business stood for: helping people. And I intend to remain in the homecare business as long as I can because I know the positive impact quality medical equipment and services for the home can have on one’s life. Honestly, there are very few things in my life that are more rewarding than taking a power wheelchair into a person’s home and watching the joy as he or she begins to access mobility they had not before.

However, Centers for Medicare and Medicaid Services (CMS) program is hindering Medicare patients’ access to impactful homecare products. Medicare’s competitive bidding program, launched on January 1 in nine metro areas around the country, is working against the best interests of patients by limiting people’s ability to get lifesaving products like oxygen tanks, sleep apnea devices, noninvasive ventilators, wheelchairs, diabetic supplies, walkers, and hospital beds.

I know that the title “competitive bidding” might lead you to believe that the program fosters competition, but in reality “competitive bidding” does the exact opposite. The program siphons off providers by selectively limiting their entry to the market through a bidding process that selects one company to become the sole provider of a particular product. This wouldn’t be so bad if these “winning” providers were chosen because of their experience and/or staff size. However, a winner is picked based exclusively on price – which is often low balled –and all other more qualified providers are shut out of the Medicare market for that particular product.

This supposed cost-cutting tool sacrifices patient access to lifesaving products that are already cost-effective. At the end of the day, this program will actually increase overall healthcare costs as seniors and those living with disabilities are forced into expensive hospital stays that were once unneeded. For instance, say an oxygen patient’s tank is not working properly, and she calls her provider to come fix it. In the current market, an oxygen tank and its needed maintenance costs $160 a month and almost all suppliers are able to visit her home within a couple hours (if not sooner) to fix the problem at no additional cost to the monthly fee. If competitive bidding comes to Utah, this same patient will call her provider who is bound to be short staffed and thus cannot come out to check the tank for hours or maybe even days. If the tank stops working, she will be forced into the hospital. This visit will cost $1,600 if she has to stay overnight. That is ten times the amount it costs to fix a problem that is currently handled at home for free – and ten times the amount taxpayers are accustomed to paying for oxygen-related Medicare problems.

Worse – what if this call happens during a storm or power outage? Currently, my staff and other HME providers are available to dispense assistance immediately to Medicare beneficiaries whose products rely on power surges. But if only one provider is allowed to deliver a product, and all others have been forced out of the market, can one business reach all the patients in need of a specific product? These questions nag at me because in the nine metropolitans where competitive bidding is operating, patients are already reporting difficulty finding these products from local equipment providers, long delays in obtaining medically required equipment, a reduced quality of the equipment they receive, and longer than necessary hospital stays due to trouble discharging patients to home-based care – and this is without a crisis in play that could be caused by a power shortage or natural disaster.

Ultimately, this program will hurt Utah’s financial health. It is estimated that if competitive bidding comes to the state, 50 percent of providers will have to close their doors. Many homecare companies are small, locally-owned businesses – establishments that are the heart of America’s economy.

But there is a solution to competitive bidding – H.R. 1041, also known as the Fairness in Medicare Bidding Act. This bipartisan bill in the House repeals Medicare’s competitive bidding for HME. Right now, two Congressmen, Reps. Matheson and Bishop, support this piece of legislation, but we need more support if we are bring this bill to the floor to a vote.

We cannot let competitive bidding come to Utah. We all must work together to encourage our Representatives to take a stand against competitive bidding for HME. If they don’t, the health and well-being of America’s most vulnerable population is in jeopardy.