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Public Comments Disclose Flaws In Medicare Program That Compromise Quality Of Care For Patients

WASHINGTON, April 18, 2014 /PRNewswire-USNewswire/ -- An array of clinicians and advocates for Medicare patients, as well as home medical equipment providers, manufacturers, and trade groups, sharply oppose a proposal by the Centers for Medicare & Medicaid Services (CMS) to expand the prices of goods and services under their bid procurement program to non-bid areas throughout the country, says the American Association for Homecare (AAHomecare).

AAHomecare reviewed the public comments and found that the overwhelming majority of the 185 comments are critical of the proposal, with many citing ramifications in areas already experiencing bidding. Some comments state outright that the bid program is devastating to Medicare patients and providers in rural communities.

"These comments, coming from a variety of individuals and organizations, offer further evidence that the CMS bidding program endangers patients and needlessly puts providers out of business," said Thomas Ryan, president and CEO of AAHomecare. "CMS and Congress should be focused on fixing these problems so that senior citizens and others living with disabilities—some of the most vulnerable people in our society—receive adequate goods and services. We need to stop the rush to expand, and make the current program work properly."

The Disability Rights Education & Defense Fund (DREDF), a leading national law and policy center that advances the civil and human rights of people with disabilities, commented that it is paramount for people living with disabilities to have ready access to skilled and seasoned rehabilitation professionals who can assess complex mobility, dexterity, and communications needs, engineer effective solutions, and remain available for follow-up and refitting.

It's clear from the organization's written comments that they don't believe these conditions are consistently met under the Medicare bid program.

"DREDF opposes any attempts to expand the competitive bidding program to include either additional regions or additional product categories," wrote Susan R. Henderson, the group's executive director. "We oppose any proposal to expand the program for the following reasons: 1) competitive bid pricing can drive smaller, community-based durable medical equipment (DME) providers on whom people with disabilities rely, out of business, and 2) force DME providers to have smaller product inventories in stock, which has an impact on consumer choice, product quality and the speed with which urgent, emergency repairs can be made."

Moreover, Henderson wrote that CMS continues to implement the bid program "even as patients have repeatedly voiced serious concerns about the lasting impact of this program on access, choice, and quality."

The Ohio Association of Medical Equipment Services (OAMES) wrote in their comment letter that "it is premature" to consider expanding the bid pricing to non-bid areas.

"Realistically, a full objective review should have been done between Round 1 and 2 before increasing the program ten-fold last year," wrote Kamela Yuricich, executive director of OAMES.  "…the bidding process has been broken since its first round launched in 2007 – from the initial problems of the website, to improperly disqualified providers, to the violation of CMS' own bidding rules such as the issuance of contracts to unlicensed providers. This has occurred through all four rounds in Ohio: Round 1, Round 1 Rebid, Round 2 and Round 1 Re-compete."

OAMES strongly argued that bidding is not appropriate for rural areas. "The cost of healthcare delivery varies by geographic areas and Ohio certainly has a wide spectrum from dense urban settings to expansive rural areas. The variables of labor, fuel, transportation, and regulatory compliance costs servicing Ohio Medicare consumers in these diverse areas are key cost factors and applying rates as a result of a non-transparent, fatally flawed program is unthinkable."

Diabetes Management & Supplies, a provider based in New Orleans, said the bid program has encouraged suppliers to bid on categories in which they have no experience, a scenario that has ultimately hurt patients by curtailing their access to goods and services. "Every day we receive new patients who have been searching the list of suppliers in their MSAs who have turned them away because they cannot supply the product," wrote Cynthia Pazos, the company's CEO.

Pazos gave a specific example regarding insulin pumps. Her company is one of the most experienced in America with this product, and she used that experience in "aggressively" bidding to provide the services. But when the pricing was announced she was "concerned" about whether the product could be supplied at such a low price. "However, I quickly recognized why it was so low," she wrote.  "Many other suppliers contacted me to offer to give me their customers because they could not afford to supply the patients even though they accepted their bid offer. Most suppliers bid on a category in which they did not have their buying pattern established and knew nothing about."

Clinicians were also critical of the bid program. 

The program and the "pricing methodology it utilizes has had a negative impact on the products and services available and provided to Medicare beneficiaries in bid areas," wrote Laura Cohen, Ph.D., PT, ATP/SMS and executive director of the Clinician Task Force. "Beneficiaries have more limited access to the full range of products in a code category than prior to the CB program…Access issues in current bid areas are attributed to bid prices that are below product and service related costs."

Allina Health Home Oxygen and Medical Equipment, which services more than 65,000 patients in Minnesota and western Wisconsin, offered a blunt assessment of the bid program in their comment letter.

Nancy G. Payne, RN, M.A., director of Organizational Integrity & Regulatory Affairs, wrote that CMS designed a bid program that doesn't hold bidders accountable, doesn't ensure bidders are qualified to provide the products in the markets, and produces bid rates that are financially unsustainable. "Economic experts from around the world agree that the current Medicare bidding program is unsustainable," she wrote. "It will create significant barriers to access and will destroy the durable medical equipment infrastructure upon which our seniors and people with disabilities rely."

Payne wrote that Allina Health supports the industry's recommendation for a Market Pricing Program.  "CMS must make some fundamental changes to ensure a financially sustainable program," she said. "Market pricing uses an auction system to establish market-based prices around the country. These changes are consistent with Congress' original intent: to create a program that is based on competition and market prices while maintaining beneficiary access to quality items and services."

Meanwhile, the American Academy of Sleep Medicine (AASM) said the 47 percent average reduction in payments for CPAP and related supplies and accessories is impacting the quality of care.

"This reduction in reimbursement has caused two significant problems: DME suppliers are unable to offer sufficient patient education and training on their PAP equipment, and fewer, high-quality, local DME suppliers are available to Medicare beneficiaries," wrote Dr. M. Safwan Badr, president of the academy.  "…our members report the Competitive Bidding Program has had a number of detrimental effects on the quality of and access to DME care."

In their comments, AAHomecare wrote that the bid program was poorly designed and implemented in a disorganized fashion. Specifically, Ryan wrote that bidders are not bound by their bids, a scenario that allows low-ball bidders to reject the contract if the price is too low. "Because bidders are not compelled to accept a contract award, there is no penalty for submitting irrational bids that result in unstainable pricing. Low-ball bidders are free to reject a contract offer, but their low bids are used to calculate the SPAs [single payment amounts]."

"The program's design flaws are so far afield from the typical commercial or government auction that approximately 244 auction experts, including three Nobel laureate economists, felt compelled to address concerns with President Barack Obama over what they felt was a program that did not meet typical commercial or government auctions," Ryan wrote.

The American Association for Homecare represents durable medical equipment providers, manufacturers, and others in the homecare community that serve the medical needs of millions of Americans who require oxygen systems, wheelchairs, medical supplies, inhalation drug therapy, and other medical equipment and services in their homes. Members operate more than 3,000 homecare locations in all 50 states. Visit www.aahomecare.org.

SOURCE American Association for Homecare

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