Request

Congressman Kendrick Meek (D-Fla.) introduced H.R. 3790 to end the Medicare “competitive” bidding program for home medical equipment and services (HME). This bill would eliminate the bidding program because it is fatally flawed and these flaws were not corrected over the past twelve months by the Centers for Medicare and Medicaid Services (CMS). The cost of eliminating the program would be offset by reductions in DMEPOS payment rates, ensuring that seniors and taxpayers still receive the intended savings from the bidding program while protecting patient access to care.

American Association for Homecare, The VGM Group, Inc., and several state associations strongly urge support for H.R. 3790. The bidding program restricts access to quality home care for seniors and people with disabilities. Providers of home medical equipment face serious disruption to their businesses if competitive bidding becomes the mechanism for Medicare reimbursement rates.

Sacrifices Care for Seniors and People with Disabilities

• Competitive bidding reduces patient access and choice for quality HME items and services.
• The program selectively contracts with a very restricted number of homecare providers based on the lowest-bid prices.

Eliminates Businesses and Jobs (Anti-competitive)

• The bid program is actually anti-competitive because it reduces the number of market competitors.
• 90 percent of qualified home medical equipment and service providers would have been barred from providing HME items and services to Medicare beneficiaries in the first round of bidding.
• The Medicare bid program will result in job losses and business failure for thousands of small providers, which runs counter to the President’s February 24 speech to Congress when he pledged to “do whatever it takes to help the small business that can’t pay its workers.”

CMS Did Not Correct the Fundamental Flaws in the Program

• The bid program is fundamentally flawed. The program was postponed by Congress in the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), but CMS did not correct the chief flaws before reissuing regulations to restart the bidding.

Bidding Is Not a Cost-effective Solution for Medicare

• Competitive bidding will increase Medicare costs because it will lead to more expensive, longer hospital stays, shifting costs from Medicare Part B to Part A.
• Home medical equipment and services already provide a cost-effective alternative to expensive institutional care and a solution for controlling spending growth in Medicare. For instance, under Medicare, a day of oxygen therapy costs less than $7 per day. A day in the hospital costs more than $5,500.
• Home medical equipment is the most cost-effective and is the slowest-growing portion of Medicare spending according to the most recent National Health Expenditures data from CMS.

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