Competitive Bidding Administration Called "A Lesson in Poor Planning, Arrogance"

Six weeks are enough, says the American Association for Homecare (AAHomecare), when it comes to the harm being done by Medicare's competitive bidding program.

In a strongly worded letter to the industry late last week, Tyler Wilson, president of AAHomecare, said, "Competitive bidding for home medical equipment must be abolished. The homecare system should not be characterized and viewed merely in terms of the lowest cost and who can provide it most cheaply."

Wilson placed blame for the program itself on Congress: "Lawmakers can be roundly criticized for mandating the program that is now causing such terrible financial hardship and economic dislocation. Congress bears the responsibility, and we should let them hear our anger."

Wilson also criticized the way the Centers for Medicare & Medicaid Services (CMS) has designed the program and called its administration "a lesson in poor planning, arrogance and clumsiness. Repeatedly, CMS has shown itself incapable of putting together and getting right basic elements of the program."

He pointed out that auction experts and economists are among those who "have repeatedly advised CMS they've gotten it wrong on a number of fronts, from program development through implementation and beneficiary education."

Going forward, Wilson says, "Nothing about CMS' handling of the program should give anyone comfort."

The letter is in stark contrast to a statement made by a CMS spokesman earlier in the month, indicating that the program was running smoothly after several weeks.

A Feb. 4 report from AAHomecare quoted CMS spokesman Peter Ashkenaz as saying implementation of competitive bidding was going smoothly. The report added that Ashkenaz dismissed the dozens of recorded complaints about the program, calling the complaints "standard" and contending that the industry was focusing on the complaints rather than helping Medicare beneficiaries.

On Feb. 14, President Obama's 2012 budget revealed plans for more funding cuts to DME, including the desire to apply Medicare competitive bidding policy and pricing to Medicaid programs.

The budget wording touts competitive bidding as "implementing innovative ways to increase efficiency for payment of durable medical equipment through the DMEPOS Competitive Bidding program, which is expected to save more than $17 billion in Medicare expenditures over 10 years." The budget proposes to extend "some of these efficiencies to Medicaid, by limiting federal reimbursement for a state's aggregate Medicaid spending on certain DME services to what Medicare would have paid in the same state for the same services."

Wilson said of that plan, "This proposal would be a disaster for the already-strapped HME sector. It would merely accelerate the race to the bottom in terms of reduced access to medically required home equipment and services and drive even more qualified home medical equipment providers out of business."

AAHomecare also expressed concern over a second budget proposal that would require prepayment review for all power wheelchairs purchased by Medicare. The budget wording claims that the error rate for power chairs is "excessively high."

The association countered, "This proposal heaps additional burdens on power wheelchair providers who are already reeling from severe reimbursement cuts, the loss of the first-month purchase option, and numerous, onerous regulations that second-guess physicians' orders for power wheelchairs for seniors and people with disabilities."

About the Author

Laurie Watanabe is the editor of Mobility Management. She can be reached at

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