New Medicare Bidding Process for Medical Equipment Flawed, Beneficiaries Say

In a new process by which Medicare beneficiaries bid on necessary medical equipment and services, many face problems that prevent them from getting the equipment they need in nine regions that have implemented the procurement system, says advocacy group American Association for Homecare.

The process, which launched in nine metropolitan areas in 2011 and is slated for 91 additional areas in 2013, has sparked controversy among patient advocacy groups.

Established under the Medicare Modernization Act of 2003 the requirements apply to a new Competitive Bidding Program for certain Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS). Under the program, DMEPOS suppliers compete to become Medicare contract suppliers by submitting bids to furnish certain items in competitive bidding areas, and the Centers for Medicare & Medicaid Services (CMS) awards contracts to enough suppliers to meet beneficiary demand for the bid items, according to CMS.

Implementation was initially delayed and rolled out in the first nine areas in 2011. With several months of data in the areas now subject to the new National Competitive Bidding process, one group has spoken out against the change.

Data collected by AAHomecare indicates that beneficiaries have experienced problems in obtaining the equipment and services they need, a finding that is contrary to recent statements by the Center for Medicare and Medicaid Services (CMS) that the well being of Medicare patients has not been compromised by the new bidding system.

While CMS has acknowledged a decrease in [durable medical equipment] utilization by Medicare patients in the nine regions, it said there was a lack of evidence of adverse beneficiary impacts.

“In the nine affected metropolitan areas – Charlotte, Cincinnati, Cleveland, Dallas, Kansas City, Miami, Orlando, Pittsburgh and Riverside, Calif. – patients tell a far different story,” AAHomecare said in a press release. “And government data from the areas demonstrate a steep reduction in the number of providers allowed to supply products and services to Medicare patients, which is preventing senior citizens and people living with disabilities from receiving the essential equipment they need.”

The system reduces choice, access and quality of care for patients, said Tyler Wilson, president of the American Association for Homecare, in the press release.

“The objective of a ‘competitive’ bidding system should be to increase competition,” Wilson said. “But the current Medicare bidding system for home medical equipment allows for non-binding bids that encourage irresponsible bidding and unsustainable prices. Moreover, the current system does nothing to ensure that winning bidders are qualified to provide products and services to Medicare beneficiaries in the specified market areas.”

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