A Manufacturer Bid?

As Congress lurches forward with its health care reform packages, some representatives have a whole new competitive bidding idea: Let home medical equipment manufacturers competitively bid under the Medicare program.

Buried in the House-passed health reform package is a provision that would have the General Accountability Office conduct a study on the concept. The basic framework would be to replace competitive bidding for HME providers with a competitive bidding program for manufacturers of HME products.

We know that the current bidding program will hurt seniors, patients and thousands of HME businesses nationwide. The program’s purpose is to contract selectively with a limited number of home care providers based on the lowest bid prices — drastically reducing patient access to, and choice of, quality care.

Replacing it with another program that would prove equally unworkable doesn’t make a lot of sense. We need to figure out a workable solution.

Before the House of Representatives left Washington for the holiday recess, the Meek bill (H.R. 3790), which would repeal the current bid program, had an impressive list of cosponsors. The bill will stay alive as this is the second year of Congress’ current two-year term. That means we must continue with our diligence and gather more supporters for this bill.

Remember, with Medicare’s ability to use bid prices in non-bid areas, the current “competitive” bid program will impact every HME provider and every Medicare beneficiary with HME needs. None of us can afford to sit on the sidelines and watch. If we all take an active role with our own member of Congress, we can move this bill through the House of Representatives.

A cautionary note, however. Two hurdles must be overcome to be successful in getting Congress to repeal the competitive bid program. First, we will have to somehow “pay” for repeal of the bid program. Congress has “pay-go” rules that essentially require any legislation that will cost the federal government money to pay for it. While at press time there had not been an official score on the bill by the Congressional Budget Office, H.R. 3790 largely pays for repeal of the program through elimination of the annual price increases and modest reductions (e.g., less than a percent a year) to the fee schedule over a few years. The second hurdle is that Congress must be convinced that the price Medicare pays for HME is reasonably related to a “market” price.

There are numerous dangerous aspects of the concept of DME manufacturer competitive bidding, not the least of which is how Medicare would compensate HME providers for all the services beneficiaries rely upon. As far as we know, there is no model for “unbundling” payment for equipment acquisition cost and the varied services that HME providers furnish to beneficiaries. This would be a dramatic change for the HME industry, particularly given that Medicare has done a poor job of defining the specific services it expects beneficiaries to receive in conjunction with their HME items. Clearly, this is a critical issue and one for which the American Association for Homecare can provide detailed input.

In addition, if the Medicare program were to limit the beneficiary’s choice of product, how will patients have access to new technology that might be available but that might not be included in the Medicare’s contract(s) with the contractor manufacturer(s)? How would Medicare ensure that contracted manufacturers’ products would meet the full array of all beneficiaries needs? How would Medicare ensure that beneficiaries will have access to quality products and that price will not be the sole determinant? What criteria would be required of contractors?

Looking at VA contracts, there are multiple complex and sophisticated requirements.

While it is good news that we are gaining support in Congress to get rid of the current bid program, we must ensure that Congress does not replace it with something that would prove equally disastrous.

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A specialist in health care legislation, regulations and government relations, Cara C. Bachenheimer is vice president, government relations, for Invacare Corp., Elyria, Ohio. Bachenheimer previously worked at the law firm of Epstein, Becker & Green in Washington, D.C., and at the American Association for Homecare and the Health Industry Distributors Association. You can reach her at 440/329-6226 or [email protected].