At-Home Care Businesses Urge President Obama to Repeal Medicare Program that Cuts Access to Homecare

Patients, Clinicians Report Problems after Implementation of Controversial Bidding Program for Home Medical Equipment; American Association for Homecare Calls for Repeal

WASHINGTON, June 27, 2011 /PRNewswire-USNewswire/ -- Providers of durable medical equipment and services (DME) required in the home have called on President Obama to repeal Medicare's controversial "competitive" bidding for homecare, which cuts quality and access to care for seniors and people with disabilities.

The program is opposed by the American Association for Homecare and by dozens of patient advocacy groups such as the ALS Association and the American Association of People with Disabilities. In addition, 244 economists recently asked the President to reconsider the bidding program. And so far, 132 members of the House of Representatives have cosponsored H.R. 1041, a bipartisan bill to repeal the program. Homecare providers are urging the President to support that legislation.

In efforts to cut federal spending, federal lawmakers have introduced a series of Medicare reforms over the years. The new bidding program aims to cut Medicare costs by targeting home medical equipment and services, which is a cost-effective yet tiny slice of the Medicare budget (less than 1.5 percent) that has seen reimbursement rates slashed repeatedly over the past 10 years.

The legislation to repeal the bidding program was introduced after hundreds of patients and providers reported problems with the program in the wake of its January 1 implementation.  As designed by the federal Center for Medicare and Medicaid Services (CMS), the bidding program severely and arbitrarily restricts the number of companies that are allowed to provide commonly used medical equipment and services.  Since the program began, patients, clinicians, and homecare providers have reported:

• Difficulty finding a local equipment or service provider;
• Delays in obtaining medically required equipment and services;
• Longer than necessary hospital stays due to trouble discharging patients to home-based care;
• Far fewer choices for patients when selecting equipment or providers;
• Reduced quality; and
• Confusing or incorrect information provided by Medicare.

In a letter dated June 20, the American Association for Homecare called on President Obama to support repeal of the bidding program. The letter states:  

"The bid program encourages 'suicide bidding' by using economic coercion to force providers to submit unsustainable bids necessary to win a contract in the hopes of staying in business in the short term. People who require home medical equipment are being harmed because services are being curtailed due to unsustainable pricing and they are not able to receive the equipment they need….

"To protect Medicare patients who receive care in their homes, AAHomecare urges you to support H.R. 1041; properly evaluate the concerns of the 244 economists, auction experts, and researchers with the competitive bidding program; and work with Congress to review and re-evaluate the DME benefit in Medicare."

Recently, 244 leading economists (including four Nobel laureates), computer scientists, and engineers with expertise in the theory and practice of auctions expressed their concerns about Medicare's bidding design for home medical equipment. In a June 17 letter to President Obama, the 244 experts noted that, "the use of non-binding bids together with setting the price equal to the median of the winning bids provides a strong incentive for low-ball bids – submitting bids dramatically below actual cost….[B]idder quantities are chosen arbitrarily by CMS, enabling a wide range of prices to emerge that have no relation to competitive market prices." The economists write that, "it is now clear that the CMS design is not an auction at all but an arbitrary pricing process."

The bidding program affects millions of American who depend on oxygen therapy, enteral nutrients (tube feeding), power wheelchairs, continuous positive air pressure (CPAP) and respiratory assistive devices, walkers, mail-order diabetic supplies, and other equipment, services, and supplies that allow Medicare beneficiaries to remain safe and independent at home. The program began in nine metropolitan areas on January 1, 2011: Charlotte, Cincinnati, Cleveland, Dallas-Fort Worth, Kansas City, Miami, Orlando, Pittsburgh, and Riverside, California. It is scheduled to begin in 91 additional areas later this year.

Other patient advocacy and consumer groups that support H.R. 1041 including the Brain Injury Association of America, the Christopher and Dana Reeve Foundation, the International Ventilator Users Network, the Muscular Dystrophy Association, National Emphysema and COPD Association, the National Council on Independent Living, the National Spinal Cord Injury Association, and United Spinal Association, among others.  

The American Association for Homecare represents durable medical equipment providers, manufacturers, and other organizations in the homecare community. Members serve the medical needs of millions of Americans who require oxygen equipment and therapy, mobility assistive technologies, medical supplies, inhalation drug therapy, home infusion, and other medical equipment and services in their homes. The Association's members operate more than 3,000 homecare locations in all 50 states. Visit www.aahomecare.org/athome.

SOURCE American Association for Homecare