HME industry makes progress at competitive bidding hearing

The HME industry made modest progress against competitive bidding last Wednesday at a hearing by the House Ways and Means Subcommittee on Health.

Witnesses presented the usual arguments for and against the program. As expected, no consensus emerged from the subcommittee on whether Medicare’s Competitive Bidding Program should be modified, replaced or expanded as is.

But the subcommittee’s chairman, Rep. Wally Herger, R-Calif., concluded the hearing by commending the HME industry for developing an alternative to competitive bidding, the Market Pricing Program (MPP), and urged the Congressional Budget Office to quickly evaluate MPP.

“Since it would not be prudent or viable to simply return to the often excessive payment rates of the old DME fee schedule, I want to commend the supplier industry for offering an alternative that is based on competition and aims to set prices using market forces,’’ Herger said. “It is my hope that the Congressional Budget Office will soon inform us of the spending implications of moving to such a proposal.”

The Congressional Budget Office evaluation is needed by the HME industry to demonstrate that MPP would yield the same savings as competitive bidding while allowing more HME businesses to survive as Medicare providers. Once an MPP proposal is scored by the Congressional Budget Office, it has a chance of passage into law, perhaps this year.

An issue raised by the hearing was exactly how many HME providers went out of business in the nine metropolitan areas where Round 1 of competitive bidding was implemented. H. Wayne Sales, chairman of the National Association of Independent Medical Equipment Suppliers, testified that 90 percent of suppliers in Round 1 areas were eliminated as Medicare providers, and an estimated 40 percent went out of business entirely.

A subcommittee member, Rep. Pat Tiberi, R-Ohio, asked the American Association for Homecare for a list of companies that went out of business. AAHomecare is now collecting names of companies that closed. Please provide this information to Jay Witter, senior director of government affairs—phone, (703) 535-1884; fax, (703) 836-6730; or email, [email protected].

A video of the hearing is available on the subcommittee’s website. Written testimony is also available on the website.