Medicare program eliminates 30 out of state suppliers in Tenn.

NASHVILLE, Tenn., June 18, 2013—According to Getahn Ward of The Tennessean, the federal Medicare program has dropped nearly a third of the companies chosen to continue supplying home medical equipment to beneficiaries statewide, leaving even fewer suppliers as part of its controversial competitive bidding program set to kick off in Tennessee in less than two weeks.

The contracts were voided because those 30 out-of-state suppliers that had won didn’t meet Tennessee licensing requirements when they submitted bids, said Marilyn Tavenner, administrator of the Centers for Medicare & Medicaid Services (CMS)

Her disclosure in a letter to the state’s congressional delegation is a small win for many Tennessee-based vendors that lost bidding contracts and won’t be reimbursed for any supplies sold to Medicare beneficiaries starting July 1.

But Tavenner stopped short of agreeing with ATHOMES, the statewide industry trade group, that the entire results of the competitive bidding process should be scrapped and restarted. The group had argued that CMS violated its own rules by not ensuring that applicants were properly licensed in the states where they were trying to do business.

“This is government at its worst,” said Ben Shapiro, chief operating officer of Ed Medical, a Hendersonville-based supplier bracing to lose a quarter of its revenue because it didn’t win a local contract. “It will create a real access problem. It’s just going to disrupt the whole competitiveness that now exists in the marketplace.”

But in her response to the lawmakers, Tavenner said given the large number of in-state suppliers remaining, she was confident beneficiaries will continue to have access to a variety of quality items and services and that her agency might consider making new awards in the future. “We will continue to examine this issue and closely monitor the situation in the state,” Tavenner said.

Through the competitive bidding program, which is being expanded to 91 metro areas including Nashville, federal officials expect billions of dollars in savings from dealing with fewer vendors. According to results from other cities in the program, Medicare was able to cut prices for many offerings—including wheelchairs, crutches and blood pressure monitors—in half.

Last week, more than 200 members of Congress wrote CMS urging a delay in implementing the latest round of the program amid concerns about its structure and licensure issues, such as the one raised in Tennessee.

“The Tennessee delegation wants to make absolutely certain that patients have reliable access to the durable medical equipment supplies that they need, that the law is followed, and that Tennessee businesses are given a level playing field,” said U.S. Rep. Phil Roe, R-TN. He was among the lawmakers urging the delay and is a co-sponsor of legislation that seeks to replace the competitive bidding program with a market pricing program.

Roe and other lawmakers said they were encouraged by some actions CMS has taken, but added that there’s more to be done. “I fear that the winning bid rates have been inaccurately calculated given the inclusion of now voided bids, and I worry that Medicare beneficiaries in Tennessee will not have sufficient options to receive necessary durable medical equipment given the large number of voided bids,” said U.S. Rep. Marsha Blackburn, R-Brentwood. “Patients in Tennessee could suffer the access-to-care issues that may arise given the volume of voided bids. Finally, I continue to have reservations about this program going live in less than two weeks with potentially similar problems in other states.”

CMS also was made aware of legitimate licensing issues in Maryland and is reviewing the situation to determine the appropriate action to take, said Tami Holzman, a spokeswoman.

“Competitive bidding is working and is saving taxpayers and beneficiaries billions of dollars,” she said. “We remain confident that seniors will have access to their equipment, (and) savings will continue.” Learn more at www.cms.gov.