Busting Bid Mythology

Sweeping health care reform legislation was signed into law in March, including a provision to expand and speed up Round 2 of Medicare’s “competitive” bidding program for home medical equipment. Stopping the bidding program and preserving the first-month purchase option for standard power wheelchairs (which was eliminated in the new law) are among top priorities for 2010.

The good news is that the bipartisan bill to eliminate the bidding program in a fiscally responsible manner, H.R. 3790, had at least 185 cosponsors in the House of Representatives at press time. HME providers have done a terrific job of educating their members of Congress about the downside of the bidding program and convincing many Democrats and Republicans to support H.R. 3790.

The bad news is the persistence of some of the myths and misinformation about the bidding program, which are being circulated to convince Congress and the public that the program is good for seniors.

We need to counter the misleading information. Here are some of the specific myths, followed by the realities:

• Myth: The bidding program is good for patients CMS claims the bid program is good for beneficiaries because it will reduce cost-sharing requirements. The truth is patient co-payments for HME have fallen dramatically for many years along with decreasing HME reimbursement rates. H.R. 3790 would reduce home medical reimbursements to offset savings that the bid program would have realized, so the effect of the bill would be a further reduction in co-payments for Medicare patients. Moreover, most beneficiaries have Medigap policies that cover co-payments, so insurance companies will be the primary beneficiary of the lower co-payments. The larger point is the bidding program triggers a race to the bottom in terms of quality and access to care. Because losing the bid means going out of business, many providers will engage in suicide bidding that coerces them to bid at economically unsustainable rates. Patients and seniors lose under the bidding program. Organizations that support the elimination of the bidding program include the ALS Association, the American Association for Respiratory Care, the American Association of People with Disabilities, the Muscular Dystrophy Association, National Emphysema/COPD Association and National Spinal Cord Injury Association, among others.
• Myth: The bidding program is a significant fraud deterrent This is extremely misleading. The real solution to keeping criminals out of Medicare is better screening, real-time claims audits, tougher penalties and better enforcement mechanisms for Medicare — not more red tape for legitimate providers. AAHomecare has proposed an aggressive 13-point plan to combat fraud (www.aahomecare.org/stopfraud), and many of those provisions are included in two bills in Congress. The Association endorses Sen. George LeMieux’s anti-fraud legislation, the Prevent Health Care Fraud Act of 2009 (S. 2128), and its companion bill in the House, H.R. 4222. Also, two new requirements that took effect in October 2009 — accreditation and surety bonds for home medical equipment providers — will go far toward eliminating fraud. Equating opposition to the bidding program with opposition to fraud prevention is simply a lie, and a disgraceful one at that.
• Myth: The bidding program represents cost containment The HME sector is the poster child for real cost control. No sector has had more numerous or deeper Medicare reimbursement cuts and red tape imposed on it. Oxygen rates have declined by about half over the past 10 years. Wheelchair reimbursements have been cut by about 35 percent over the past five years. The delay to the bidding program in 2008 required a 9.5 percent cut effective in 2009. The perfectly obvious reality is home medical equipment and services enable Medicare, Medicaid, and private health care to be cost-effective. HME speeds discharges from hospitals to quality post-acute care. It helps keep people out of hospitals, nursing homes, and the emergency room. It is critical that every HME stakeholder make these messages clear to Congress.

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 [email protected]. For more information on critical home care issues, visit the association’s Web site at www.aahomecare.org.