A new Medicare
bidding program for durable medical equipment (DME) scheduled to be
implemented in the Riverside-San Bernardino-Ontario, California area on
July 1, 2008, will put many DME providers out of business. The program will
likely disrupt homecare services for many of the 249,000 seniors and people
with disabilities who are eligible for Medicare in the Riverside
metropolitan area.
The bidding program is scheduled to hit six other metropolitan
statistical areas in California next year, including Bakersfield, Fresno,
Los Angeles-Long Beach, Sacramento, San Diego, San Jose, and Visalia.
In late March, DME providers in the first ten competitive bidding
regions received letters from the Centers for Medicare and Medicaid
Services (CMS) explaining whether they had been offered a contract, been
disqualified from bidding, or bid outside of the bidding range for a
product. Those DME providers that did not receive contracts for a given
Medicare item or service are shut out of the Medicare program for three
years.
The American Association for Homecare has received word from hundreds
of DME providers who say they have been improperly disqualified and thereby
removed by CMS from the bidding process. That includes more than a dozen
cases of disqualified bidders in the Riverside and San Bernardino areas.
The congressionally mandated competitive bidding program was designed
to reduce the number of DME providers and reduce reimbursement rates for
oxygen therapy, hospital beds, wheelchairs, and other types of home-based
equipment and care in Medicare. Reimbursement rates are already set by
Medicare and reimbursement rates for oxygen have already been cut by nearly
50 percent over the past 10 years. The DME industry has long argued that
this new program will needlessly punish established, high-quality
providers, reduce the DME industry's focus on service, and harm patient
access to care.
The DME industry consists primarily of small to medium-sized businesses
serving relatively small service areas. The average DME company receives
about 50 percent of its business from Medicare patients. Loss of this
business will result in layoffs and business failure for many DMEs.
"The Secretary of Health and Human Services has called home-based
healthcare 'radically' more efficient than institutional care, yet the
federal government is determined to aggressively dismantle the nation's
homecare infrastructure at a time when our healthcare system needs it the
most," said Tyler J. Wilson, president of the American Association for
Homecare. "DME spending is the smallest sliver of Medicare, less than two
percent of spending, and is the slowest-growing segment. Taxpayers may
ultimately face higher costs as hospital stays lengthen due to more
complicated hospital discharge logistics, more emergency room visits, and
cost-shifting from Medicare Part B to Part A services."
The American Association for Homecare is pursuing regulatory,
legislative, and legal remedies to allow for review of the cases of those
DME providers that have been disqualified and is calling for the suspension
of the first round of the bidding program until questions about patient
access and harm to DME providers can be fully assessed.
The American Association for Homecare (AAHomecare) represents providers
of durable medical equipment and related services and supplies as well as
equipment manufacturers. AAHomecare members serve the medical needs of
millions of Americans who require home oxygen equipment, wheelchairs and
other mobility products, hospital beds, medical supplies, inhalation drug
therapy, home infusion, and other medical equipment, therapies, services,
and supplies delivered in the patient's home. AAHomecare's provider members
operate more than 3,000 home care locations in all 50 states. See
aahomecare.
American Association for Homecare
aahomecare