Under Fire

Is Competitive Bidding Hurting Your Access to Home Medical Equipment Benefits?

competitive biddingIt’s your power or manual wheelchair, your walker or cane, your wheelchair cushion or scooter. It’s crucial to your mobility, your safety and comfort, your active lifestyle.

But your home medical equipment — or HME, as the industry says — could be under fire if you’re a Medicare patient… even if the equipment was prescribed by your doctor.

Medicare says its national competitive bidding program (NCB) can save money by paying less for HME. Opponents say Medicare patients ultimately suffer because equipment is more difficult to obtain and patient choice is reduced.

Not a Medicare patient? Because of the size of the Medicare program, other healthcare payors such as Medicaid and private insurance companies closely watch Medicare. And they often take cues from Medicare. Think of it as a trickle-down effect, healthcare style.

National Competitive Bidding Gets Underway

Before competitive bidding existed, a doctor would write a prescription for HME, and the patient would take the prescription to an HME supplier. The supplier would “fill” the prescription by providing the equipment to the patient, and then submit a claim to Medicare for payment. Medicare paid the supplier according to a fee schedule, a previously established list of dollar amounts that Medicare agreed to pay and suppliers agreed to accept as payment.

Then in 2011, Medicare launched its national competitive bidding program in nine areas across the country:

  • Cincinnati/Middletown (Ohio, Kentucky & Indiana)
  • Cleveland/Elyria/Mentor (Ohio)
  • Charlotte/Gastonia/Concord (North Carolina & South Carolina)
  • Dallas/Fort Worth/Arlington (Texas)
  • Kansas City (Missouri & Kansas)
  • Miami/Fort Lauderdale/Pompano Beach (Florida)
  • Orlando/Kissimmee (Florida)
  • Pittsburgh (Pennsylvania)
  • Riverside/San Bernardino/Ontario (California)

Competitive bidding works like this: Using the fee schedule as a starting point, suppliers who want to continue to serve Medicare patients must submit “bids.” Those bids tell Medicare how cheaply dealers would agree to be compensated. To qualify, a bid has to be less than Medicare’s previously established payment amount — so in reality, suppliers are competing against each other regarding how steep a pay cut they’re willing to take for many popular types of HME, such as hospital beds, standard power wheelchairs, scooters, walkers, therapeutic support surfaces (mattresses) and oxygen.

Are Patients Getting the Equipment They Need?

Under competitive bidding, Medicare works only with suppliers whose bids met program criteria and who agreed to accept the lowest payments — i.e., those who agreed to the steepest pay cuts. Suppliers whose bids were too high can no longer provide those competitively bid HME items to patients and bill Medicare.

After Medicare announced the “winners” for the first round of the program, the number of suppliers providing HME to Medicare patients in the bid areas dropped nearly 70 percent. In those nine bid areas, there are now fewer than 1,300 suppliers to serve 3.5 million Medicare patients.

Patients therefore have fewer suppliers to choose from and may have to travel much farther to visit that supplier.

The American Association for Homecare (AAHomecare), an industry organization of HME suppliers, calls competitive bidding “dangerously flawed.” It points out that in those competitive bidding areas, Medicare is receiving fewer claims for HME, indicating that fewer Medicare patients are receiving HME.

“Consumer advocates, auction experts, (HME) providers, and economists are concerned that seniors and people living with disabilities are not receiving critical medical equipment and services,” AAHomecare said in a February news announcement. “Since the program was implemented in 2011, the American Association for Homecare has received reports from hundreds of Medicare patients about difficulty finding local equipment and service providers, delays in obtaining medically required (HME), and fewer choices when selecting equipment and providers.”

Making Your Voice Heard

Members of Congress are concerned, too. A bill in the House (H.R. 1041) would repeal competitive bidding, and at press time, 166 members of Congress had signed it. Competitive bidding’s second round — which will expand the program from nine areas to 100 areas nationwide — is currently getting underway.

If you’re concerned about the impact competitive bidding could have on your HME benefits, contact your senator and representatives and tell them so, AAHomecare suggests. Visit aahomecare.org to learn how to contact your members of Congress, or to report a problem if competitive bidding has already hurt your access to the HME that could improve your safety, independence and health.

This article originally appeared in the Consumer Edition 2012 issue of Mobility Management.

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