SBA hears testimony about DME bidding impact

WATERLOO, Iowa, June 27, 2013—According to VGM & Associates, on June 21 healthcare advocates and medical equipment suppliers came from across the country to gather in Iowa for a Regulatory Fairness Hearing hosted by the U.S. Small Business Administration. Joined by representatives from several Congressional offices, they testified about Medicare’s competitive bidding program and its potential to hurt industry, threaten patients and cost taxpayers. A number of representatives testified at the hearing, and the groups also submitted dozens of comments to SBA for the hearing’s record. The event followed a similar hearing in Seattle, where independent providers had a strong presence and pressed CMS to delay Round 2 of the competitive bidding program, the expansion which is set to take place July 1. 

The speakers expressed concerns that the competitive bidding program’s lack of accountability encourages a race to the bottom on local service and quality of equipment for Medicare beneficiaries. This will inevitably result, they said, in many beneficiaries being forced into institutional care settings as a result of a decline in quality of home care services. They also argued that Round 1 of the program’s implementation has shown disturbing signs for what is to come should the program expand. During Round 1, many qualified medical providers have been denied contracts and gone out of business, while contracts have been awarded at unsustainably low rates that force “winners” to cut staff and services. In some exceptionally troubling cases, contracts have even been awarded to suppliers who are unqualified or unlicensed to provide the services for which they’ve been contracted. Those who testified at the conference expressed concern that, should the program be allowed to expand to a broader market, the results will be disastrous, not just for the home healthcare industry, but for vulnerable senior citizens and people with disabilities who rely on their services.

Cindy Ciardo, of Knueppel Healthcare Services in Wisconsin, elaborated on the damage this flawed bidding system will have on her business and her patients: “We were one of the companies that bid responsibly for products we already supply, with rates we could still afford, for a capacity that we could truly handle, and in an area where we actually had a presence and have been servicing for almost 60 years. We did not receive a single bid offer. As of July 1 we will no longer be able to supply beneficiaries with wheelchairs, hospital beds, support surfaces or walkers. Beneficiaries will be left with a broken system and will be forced to accept lengthy delays, substandard care and service, or both.”

Ryan Ball, director of State Policy with VGM & Associates, commented on the significance of the hearing in the growing movement to delay expansion of competitive bidding: “CMS should take note that, just after a bipartisan majority in the House of Representatives called for a review of competitive bidding, independent providers from every competitive bidding area in the Midwest have come together today testify against this flawed program. We are here to keep the pressure on CMS and remind them of the serious consequences this program will have moving forward.”

The upcoming expansion of the competitive bidding program will have serious consequences for medical suppliers nationwide. Businesses in the small number of test markets where competitive bidding is already in place have experienced devastating cuts, and should the program expand to 91 additional markets, as it’s scheduled to do in July of this year, up to 100,000 people will likely lose their jobs. The impact will be felt most heavily by small businesses, and those who took part in today’s hearing were hopeful that their testimony would bring attention to this flawed system and the urgent need to delay its expansion and, ultimately, replace it with a system that would set fair prices and allow them to continue providing their patients with quality care.

AAHomecare Vice President of Provider Relations Wayne Stanfield submitted comments for the hearing’s record. Read the full text of Stanfield’s testimony here. Go online to www.vgm.com and www.aahomecare.org.