House hearing to address concerns over Medicare durable medical equipment competitive bidding program

The House Ways and Means Health Subcommittee on Tuesday plans to hold a hearing on a Medicare competitive bidding program for durable medical equipment, CQ HealthBeat reports (Carey, CQ HealthBeat, 5/5).

In 2008, the program will operate in 10 of the largest Metropolitan Statistical Areas and will apply to 10 of the top durable medical equipment, prosthetics, orthotics and supplies product categories. In 2009, the program will expand to an additional 70 MSAs and will continue to expand in future years. The program also will apply to additional product categories in future years. Under the program, CMS will select durable medical equipment suppliers based on bids they submit. The 2003 Medicare law mandated the program as part of a larger effort to implement competitive bidding for CMS reimbursements. The program, scheduled to take effect on July 1, likely will result in an average 26% decrease in the prices of medical equipment in the 10 MSAs, according to CMS (Kaiser Daily Health Policy Report, 4/8).

Subcommittee Chair Pete Stark (D-Calif.) said that the hearing will address concerns from durable medical equipment suppliers and advocates for Medicare beneficiaries that the program is "not working as well as it is supposed to" (CQ HealthBeat, 5/5). According to Stark, the hearing will allow lawmakers to determine whether the program requires revisions before the scheduled expansion in 2009 (Edney, CongressDaily, 5/6). Stark said, "I'd like to see the whole thing scrapped." He added that Congress likely will take action to revise the program, with only the "question of whether we'll do it in 2008 or 2009." The House Small Business Committee plans to hold a hearing on the program later this month (Wilde Mathews, Wall Street Journal, 5/6).

Comments

Critics maintain that the program will "hurt beneficiaries' access to vital medical equipment and services," according to CQ HealthBeat (CQ HealthBeat, 5/5). In addition, critics maintain that the program will reduce, rather than encourage, competition (Wall Street Journal, 5/6). According to some critics, many durable medical equipment suppliers awarded contracts under the program do not have facilities in the areas they seek to serve and do not have the capacity to meet the demands of Medicare beneficiaries (CQ HealthBeat, 5/5).

Some durable medical equipment suppliers also have raised concerns that the program improperly disqualifies hundreds of suppliers from participation (Wall Street Journal, 5/6). The American Association for Homecare said that the program will force many small durable medical equipment suppliers, which receive half of their revenue from Medicare business, to eliminate jobs or close (CongressDaily, 5/6).

Acting CMS Administrator Kerry Weems, who plans to testify at the hearing, said that Medicare will pass savings from the program to beneficiaries, who pay 20% of the cost of durable medical equipment out of pocket (CQ HealthBeat, 5/5). In addition, he said that CMS does not plan to delay or make significant revisions to the program (CongressDaily, 5/6).

Weems also said that small durable medical equipment suppliers accounted for 60% of the companies awarded contracts under the program (CQ HealthBeat, 5/5). According to Weems, a CMS review of documents for 100 durable medical equipment suppliers disqualified from the program found that those disqualifications were warranted (Wall Street Journal, 5/6). Weems added that CMS will work with Medicare beneficiaries to ensure they experience no disruption in services when they switch to new durable medical equipment suppliers and will distribute to health care providers a list of suppliers in their areas (CongressDaily, 5/6).

Lobbying Efforts

In related news, two newspapers recently examined lobbying efforts against the competitive bidding program. Summaries appear below.

• The Hill: The Hill on Tuesday examined an effort by the National Coalition for Assistive and Rehab Technology to have complex wheelchairs exempt from the new Medicare competitive bidding program (Young, The Hill, 5/6).
• Washington Post: The Post on Tuesday examined the American Association for Homecare to opposition to the program (Birnbaum, Washington Post, 5/6).