DME bidding continues to haunt the homecare sector

Healthcare groups have urged Congress and the Centers for Medicare and Medicaid during the past year to fix or eliminate the proposed durable medical equipment competitive bidding process, fearing that it won't work.

In approving the Medicare Improvements for Patients and Providers Act of 2008 (H.R. 6331), Congress agreed to delay CMS’ DME competitive bidding to allow for some quality improvements and reforms to HME policy and the bidding program. The homecare industry paid for the delay through a nationwide 9.5 percent payment cut on homecare items and services subject to bidding.

According to opponents of the DME process:

1. The law requiring bidding is five years old, but the implementation rules were not announced until last year. After taking more than six months to review bids, the American Association for Homecare said CMS rushed the implementation, providing incomplete and inconsistent information to beneficiaries. Critics say the interim final rule, published by CMS on January 16, did not allow enough time for stakeholder comment.
2. The bidding program would lower quality and reduce access to care for seniors and people with disabilities, according to a letter signed in April by 84 bipartisan members of Congress. “The current version of the bidding program will put at least 90 percent of providers – many of which are small businesses – out of work at a time when unemployment is high and government is already fighting to protect jobs,” it said. A study released by Brian O’Roark of Robert Morris University indicates the CMS misread the marketplace and that the competitive bidding program reduces overall competition and hurts the quality of patient care.
3. With reform on lawmakers' minds, it's important to preserve the DME sector. According to the American Association for Homecare, spending on home medical equipment and care is the most cost-effective and slowest-growing portion of Medicare, increasing only 0.75 percent per year. That rate compares to more than 6 percent annual growth for Medicare spending overall. DME represents only 1.6 percent of the Medicare budget.
4. The DME program’s current structure bears no resemblance to successful 1997 and 1998 demonstration programs in Florida and Texas. Of the more than 4,000 providers in the initial bidding areas, only 376 were deemed to have met the bidding program requirements.

Despite legislation to eliminate the bidding program – a bipartisan bill, H.R. 3790, which would reduce Medicare reimbursements to home medical equipment providers from 2010 to 2015 – CMS began accepting bids in November from accredited and bonded medical equipment suppliers after modifying the program and conducting supplier outreach and education efforts.

Currently, 93 percent of all medical equipment suppliers across the country – including those in the competitive bidding areas – have met Medicare’s accreditation requirements for the round one re-bid.