The durable medical equipment industry was threatened at every turn in 2009, as fighting over the DME Medicare competitive bidding final rule was intense.
Of the more than 4,000 DME providers in the initial bidding areas, only 376 met the bidding program requirements, which critics said were not clearly defined.
In February 2009, DME vendors got a reprieve when the Centers for Medicare & Medicaid Services announced a 60-day delay of the effective date of the Competitive Bidding Interim Final Rule, to April 18, 2009.
The announcement came one day after comments on the rule were due to the agency and just weeks after a memorandum from White House Chief of Staff Rahm Emanuel recommending that all federal agency heads consider the extension for “the purpose of reviewing questions of law and policy.”
The DME bidding program has been called “anti-competitive,” “controversial” and “deeply flawed.” Some expect it to eliminate 90 percent of the homecare providers – typically small, family-owned businesses – in any marketplace where it is implemented.
Despite the 60-day delay for re-evaluation, CMS didn’t rescind the controversial competitive bidding rule before it was scheduled to go into effect in April.
In mid-October, after months of making modifications and conducting supplier outreach and education efforts, CMS opened for 60 days a round one re-bid of the durable medical equipment competitive bidding program to Medicare-approved medical equipment suppliers in nine communities.
“Competitive bidding is an essential tool to help Medicare beneficiaries pay appropriately for high quality healthcare items and services furnished by Medicare-approved suppliers,” said Jonathan Blum, director of the CMS’ Center for Medicare Management.
Others do not agree. “If we are fortunate (or unfortunate) to be a winning bidder in this ill-conceived program, we will have a fixed price through 2013, minimal competition and very few incentives to provide exceptional service,” said Joel Marx, CEO of Medical Service Company in Cleveland, a round-one bidder. “Patients will ultimately pay the price.”
Most recently, in the midst of the round one re-bid cycle a House bill calling for its elimination has been introduced in the House of Representatives.
The California Association of Medical Product Suppliers and the American Association for Homecare are backing the bipartisan bill, H.R. 3790, which would reduce Medicare reimbursements to home medical equipment providers from 2010 to 2015.
The bill intends to ensure that seniors and taxpayers receive the savings projected for the bid program. It would also prevent medical suppliers from being forced to close their doors when not chosen in the competitive bidding process and allow patients to use the supplier of their choice.
Home medical equipment and care has been deemed 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.
Indeed, home medical equipment represents only 1.6 percent of the Medicare budget.