The first comprehensive study of the impact of HME "competitive" bidding on
Medicare beneficiaries has been completed by a respected actuarial
firm in Washington, D.C.
Among the conclusions:
Medicare's bidding program will lead to desperation bidding and
reduced prices, likely causing Medicare's most vulnerable
beneficiaries to see a decrease in choice, access, and quality in
the HME benefit.
Ultimately, the bidding program could increase Medicare's costs
if beneficiaries have more medical complications, thereby
increasing their use of hospital, emergency room and physician
care, and perhaps losing their ability to live independently.
The study was commissioned by AAHomecare and was conducted by
Dobson DaVanzo & Assoc., an actuarial firm in Washington, D.C.
In their research, the firm conducted an extensive review of the
published literature and conducted interviews with patient
advocates, beneficiaries, discharge planners, academic experts and
HME providers.
Titled "The Risks to Medicare Beneficiaries of DMEPOS
Competitive Bidding: Compromising Choice, Access, and Quality for
Medicare's Most Vulnerable," the study will be shared with every
member of Congress as well as the media. Some of the key findings
follow:
Marketplace Implications
The design of the competitive bidding program creates
economic incentives that could have a negative impact on price,
quality and service for Medicare beneficiaries.
The design of the CMS bidding process is highly susceptible to
"gaming," allowing sophisticated bidders to use complex rules and
the volatility of supply and demand to their advantage.
The three-year bid period, the composite price structure used to
calculate prices and both "predatory" and "suicide" bidding could
produce unrealistically low bid prices incompatible with a system
that ensures sustained service and product quality.
Fewer suppliers could lead to less price competition over the
long term, not more.
Choice
Freedom of choice will be challenged for beneficiaries both
in terms of providers and equipment that will be
available.
The competitive bidding program could eliminate up to 90 percent
of DMEPOS suppliers, limiting choice of preferred providers and
disrupting long-term relationships and continuity of care.
Access
As the number of suppliers is reduced, beneficiaries could
experience problems accessing quality equipment and services,
especially over time and by geographic area.
Lower payments to suppliers may reduce beneficiary access to
high quality, brand name and customizable equipment, and other
effective supplies familiar to the patient.
The bidding program may not adequately protect against supplier
unavailability and delayed response time, causing hospital
discharge delays and/or more emergency department visits.
The program may reduce the provision of various services on
which beneficiaries rely to remain independent and prevent
complications, such as patient evaluation, education, training,
equipment customization, adjustment and timely repair and
maintenance.
Quality
Suppliers may not be able to provide high-quality products,
and may significantly reduce the services they provide to
beneficiaries.
They may not be able to afford (and are not incentivized to
provide) products of the same quality, which can affect beneficiary
mobility, general health condition, and quality of life.
Technological innovation and development of high-quality
products may be stifled.
These are serious concerns gathered from a broad array of health
care experts and advocates. The HME community should make sure that
these key points are part of the argument against the bidding
program.
The full study can be accessed from the American Association for
Homecare website, www.aahomecare.org.
Read more AAHomecare
Update columns. View more competitive bidding
stories.
Tyler J. Wilson is president and CEO of the American
Association for Homecare, headquartered in Arlington, Va. You can
reach him at tylerw@aahomecare.org. For more
information on critical home care issues, visit the association's
Web site at www.aahomecare.org.The first
comprehensive study of the impact of HME "competitive" bidding on
Medicare beneficiaries has been completed by a respected actuarial
firm in Washington, D.C.