American Association for Homecare Backs Bipartisan Bill to Eliminate Medicare Bidding Program for Home Medical Equipment

American Association for Homecare Backs Bipartisan Bill to Eliminate Medicare
Bidding Program for Home Medical Equipment

H.R. 3790 Will Reduce Medicare Spending, Preserve Patient Access to Quality
Care, and Save Thousands of Small Businesses; Flawed Bid Process Begins on
October 21 in Charlotte, Cincinnati, Cleveland, Dallas-Fort Worth, Kansas
City, Miami, Orlando, Pittsburgh, and Riverside, Calif.

ARLINGTON, Va., Oct. 20 /PRNewswire-USNewswire/ -- The American Association
for Homecare praised a bipartisan group of lawmakers in the House of
Representatives for backing introduction of H.R. 3790, a bill to eliminate the
controversial, deeply flawed "competitive" bidding program for durable medical
equipment and services in Medicare.

Durable, or home medical equipment, such as oxygen, wheelchairs, diabetic
supplies, and hospital beds, enables seniors and people with disabilities to
receive quality care at home. Home-based care represents a cost-effective
alternative to institutional care, and seniors prefer to receive care at home
rather than in an institution.

To ensure that seniors and taxpayers receive the savings projected for the bid
program, the bill would reduce Medicare reimbursements to home medical
equipment providers in 2010, 2011, 2012, 2014, and 2015. At the same time,
the bill will allow thousands of home medical providers to keep their doors
open to serve the millions of Americans who require home-based care and will
allow patients to continue to receive services from the providers of their
choice.

The bill, introduced by Rep. Kendrick Meek (D-Fla.), is cosponsored by Jason
Altmire (D-Pa.), Steve Austria (R-Ohio), John Boccieri (D-Ohio), Bruce Braley
(D-Iowa.), Jo Ann Emerson (R-Mo.), Sam Farr (D-Calif.), Alcee Hastings
(D-Fla.), Eddie Bernice Johnson (D-Tex.), Ron Klein (D-Fla.), Dan Maffei
(D-N.Y.), John Murtha (D-Pa.), Tim Ryan (D-Ohio), Heath Shuler (D-N.C.),
Glenn Thompson (R-Pa.), Patrick Tiberi (R-Ohio), and Debbie Wasserman Schultz
(D-Fla.).

The introduction of the legislation comes just days before the scheduled
start-up of the bidding process for the bid program for home medical
equipment. The Medicare bidding process will begin on October 21 in nine
metropolitan statistical areas (MSAs) across the U.S. - Charlotte, Cincinnati,
Cleveland, Dallas-Fort Worth, Kansas City, Miami, Orlando, Pittsburgh, and
Riverside, Calif. The bid prices and bid winners would be selected in 2010
and the new prices would become effective January 1, 2011. Another round of
bidding would begin shortly after that in 100 MSAs across the U.S.

"We recognize the need to control costs in Medicare. However, the home medical
equipment sector has seen far more than its share of reimbursement cuts over
the past 10 years," said Tyler J. Wilson, president of the American
Association for Homecare. "This bidding program is designed to selectively
contract with a small fraction of the nation's home medical equipment
providers and put the vast majority of them out of business even if they agree
to new, lower reimbursement rates. That's not good for the seniors and people
with disabilities who depend on quality home medical equipment and services in
order to remain independent."

Categories subject to the bid program include medical oxygen, which is a
highly regulated prescription drug, complex rehabilitative power wheelchairs,
enteral nutrients (used in tube feeding), and hospital beds, among other
categories.

"A strong community of home medical equipment providers across the U.S. will
help keep seniors at home instead of going into nursing homes and help move
them out of hospitals for post-acute care more quickly," Wilson said. "In
short, home-based care is part of the solution to the nation's healthcare
problem."

K. Eric Larson, executive director of the National Spinal Cord Injury
Association, said, "A 'competitive' bidding program that relies solely on the
price of a winning bid simply cannot guarantee quality of, and access to the
care our members need. Home medical equipment providers offer quality items
and service to beneficiaries living with paralysis and complex conditions such
as amyotrophic lateral sclerosis (ALS), muscular dystrophy, and spinal cord
injuries who rely on customized mobility equipment, life-dependent oxygen, and
other life-preserving medical equipment, service, and care. This bidding
program needs to be repealed before the program creates human tragedies across
the country."

Paul J. Tobin, president and CEO, United Spinal Association, said,
"Congressman Meek and other bipartisan leaders in the House have recognized
that wheelchairs and a host of other home medical devices are essential tools
which, when properly configured for each individual patient, can liberate a
person and maximize their quality of life. Unfortunately, the competitive
bidding process will eliminate the home medical equipment provider's ability
to individually customize equipment based upon each patient's medical needs
and restrict the patient's ability to work face-to-face with a local provider.
If implemented, competitive bidding will have tragic, unintended consequences
for seniors and people with disabilities."

The initial roll-out of the bidding program in 2008 produced disastrous
results for home medical equipment patients and for providers (mostly small
businesses) who were excluded from Medicare as a result of the first round of
bidding. During the 2008 implementation, serious problems were encountered,
such as:

-- Disruption to patient services - Patients were forced to go to
multiple,
unfamiliar providers for different items and services. Informal
surveys
showed that some winning providers were unable to provide care to
beneficiaries.
-- Greater costs to Medicare due to longer hospital stays - Confusion
about
the restricted list of contracted home medical providers delayed
hospital discharges and triggered unnecessary emergency room visits.
-- Non-local providers - Providers with no history of servicing a
geographic area or no operations in a bidding area were awarded
contracts.
-- Inexperienced/unlicensed providers - Companies were awarded Medicare
contracts to provide equipment and services for which they were not
licensed in their states and for which they had no previous experience
providing.

-- Desperation bidding - Structural flaws in the bidding program caused
providers to submit artificially low bids because they were faced with
the threat of losing their businesses if not awarded a contract.
Winning
contracts also were viewed as commodities that could be sold once a
bid
was won.

Due to these problems, Congress delayed the bid program when it enacted the
Medicare Improvements for Patients and Providers Act of 2008, in hopes that
the federal Centers for Medicare and Medicaid Services would substantially
improve and reform the program. However, the fundamental problems still remain
in the bid program. The congressional action last year to delay the bidding
program also required that the home medical equipment sector accept a 9.5
percent reimbursement cut effective January 1, 2009 to pay for the savings the
bid program would have reaped.

"Competitive bidding will produce a bureaucratic, anti-competitive system that
will have the unintended consequences of reducing quality and access to care
for patients," said Wilson. "The result would be similar to a closed-model
HMO and will have the effect of government-mandated consolidation in homecare.
There are far better ways to save money than destroying the home medical
sector."

Home medical equipment and care is already the most cost-effective,
slowest-growing portion of Medicare spending, increasing only 0.75 percent per
year according to the most recent National Health Expenditures data. That
compares to more than 6 percent annual growth for Medicare spending overall.
Home medical equipment represents only 1.6 percent of the Medicare budget.

Visit www.aahomecare.org/competitivebidding for details about the bid program.

The American Association for Homecare represents durable medical equipment
providers and manufacturers serving the medical needs of millions of Americans
who require medical oxygen, wheelchairs, medical supplies, inhalation drug
therapy, home infusion, diabetic supplies, and other medical equipment and
services in their homes. Association members operate more than 3,000 homecare
locations in all 50 states. Visit www.aahomecare.org.

SOURCE American Association for Homecare

Michael Reinemer, +1-703-535-1881, michaelr@aahomecare.org; or Tilly Gambill,
+1-703-535-1986, tillyg@aahomecare.org, both of the American Association for
Homecare