AAHomecare: bidding decision will harm patients
WASHINGTON, D.C., Feb. 27, 2013—The Medicare bidding program for Durable Medical Equipment (DME) is devastating small and large businesses in communities across the country. And Medicare beneficiaries—senior citizens and people living with disabilities—are being endangered because of delays in obtaining critical homecare equipment, such as oxygen therapy, power wheelchairs, and diabetic testing supplies.
Last month, the Centers for Medicare & Medicaid Services (CMS) announced an average cut of 45 percent in reimbursement rates for DME items when the dangerous and defective bidding program expands this summer to an additional 91 locations. Already, repercussions are being felt by the businesses that will be slammed by the capricious price cuts, which economists insist are more the result of government price-fixing than actual competitive bidding.
How bad is it? Tom Fitzsimmons, owner of Fitzsimmons Home Medical Equipment in Chicago, is basically giving up. His grandfather started the business in the 1930s, but Fitzsimmons says he will close seven of his eight locations, laying off 70 full-time workers because he will lose 80 percent of his business when the CMS bidding program expands on July 1.
Thus far, 244 economists, more than two dozen consumer and disability groups, 186 members of Congress, and the National Federation of Independent Business have denounced the bidding program. “There are winners and losers, but winners are chosen based on their willingness to game the system rather than their cost competitiveness,” says Dr. Brett Katzman, interim chair of the Department of Economics, Finance & Quantitative Analysis at Kennesaw State University.
Moreover, this failed public policy is unfairly dismantling a network of providers dedicated to serving the most vulnerable people in our society. These homecare providers are being forced to lay off workers, close their businesses, or no longer service Medicare patients. In many cases, Medicare beneficiaries are baffled by a process that is replacing DME providers who have delivered outstanding service and products for decades with new suppliers who—because of the drastic cut in prices—can’t provide the same level of service. What’s clear is that government bureaucrats did not comprehend the impact of their arbitrary price cuts. For instance, a serious health risk is developing in California.