The Ohio Association of Home Medical Equipment Services has announced its opposition to The Centers for Medicare & Medicaid Services' competitive bidding plan for Medicare reimbursements – which the association says will put medical equipment providers out of business and reduce access to important products and services.
The OAMES is backing H.R. 3790, a bill the group says would provide other kinds of cost savings that will reduce reimbursements while preserving access to patients.
"The Medicare 'competitive' bidding program, conceived over a decade ago, is an out-dated, economically-crippling initiative aimed at a segment of healthcare that currently represents the slowest growing, most cost-effective option for our seniors – home medical services," said Kam Yuricich, the group's executive director.
The competitive bidding process is underway in nine cities across the country, with winning bid prices set to go into effect Jan. 1, 2011. Ohio is home to two cities in the pilot program, Cleveland and Cincinnati, which in turn will affect providers in another five cities: Akron, Columbus, Dayton, Toledo and Youngstown.
The reaction from the Ohio group comes roughly a month after CMS announced the winning bid amounts – bids that slashed reimbursements to home medical equipment providers an average of 32 percent. Among the most frequently used medical equipment that falls under competitive bidding, CMS announced savings for such items as oxygen concentrators (from $173 to $116 per month) and diabetic supplies, with reimbursement set to be cut from $75 a month to $33.
Such large reductions in reimbursements have led OAMES to label the bids as "suicide bids" – ones that are unsustainably low and would put established medical equipment providers out of business.
CMS is apparently digging in for a battle, with officials saying competitive bidding is the best way to reduce costs for durable medical equipment. In a conference call in early July, Laurence Wilson, the CMS' director of chronic care policy, said: "We do screen bids that are on the low side (to) determine whether or not the supplier can actually provide the service or the item at that price. That includes looking at invoices ... and the supplier's financials, including their liquidity and credit, and their ability to expand into a market area. We have been very careful in selecting suppliers and in scrutinizing these bids, in terms of prices and sustainability. I think we're comfortable, when we look at the prices that we see."
Some providers aren't buying that argument, and are instead backing H.R 3790.
"The operating costs of the services we provide are far more than just the acquisition cost of the equipment or supply," said John Reed, senior vice president of PRO2 Respiratory Services in Lima, Ohio. "The costs are, in many cases, mandated by accreditation, federal, state and local regulations and cannot be reduced or eliminated."
"No matter how often we communicate this, insulated and uninformed administration officials refuse to understand the fundamental facts about offering this cost-effective and efficient service to the elderly," Reed said.