The California press is picking up on the Medicare Competitive Bid battle.  It started with a piece written by a California provider, Allen Kennedy, which was published in the opinion section of The Bakersfield Californian on March 11.  Mr. Kennedy's article does an excellent job of outlining the problems with the CMS competitive bid process.  You can access Mr. Kennedy's original article at http://www.bakersfieldcalifornian.com/opinion/hot-topics/x738927460/ALLEN-KENNEDY-Medicares-looming-changes-to-home-health-care-to-hurt-many . 

In response to Mr. Kennedy's article, David Sayen, Medicare's regional administrator for Nevada, California, Arizona, Hawaii, and the Pacific territories published an alternative view point.  Mr. Sayen's response has since been picked up by multiple blogs.  You can access the original response and blog posts by way of the links below.

 

http://www.bakersfieldcalifornian.com/opinion/community-voices/x738927648/ANOTHER-VIEW-Ongoing-changes-to-Medicare-will-save-Americans-billions

http://cupertino.patch.com/articles/competitive-bidding-for-medicare-can-save-money

http://sanmateo.patch.com/blog_posts/competitive-bidding-saves-money-for-people-with-medicare

http://berkeley.patch.com/blog_posts/competitive-bidding-will-save-money-for-people-with-medicare

http://culvercity.patch.com/blog_posts/blog-medicares-competitive-bidding-will-save-money-for-people-in-los-angeles-county

 

CAMPS has responded today with a request to each of the publications to publish the following article from President Tony Myrell.  We respectfully request that providers also visit the blogs referenced above and provide responses to Mr. Sayen's posts. Your response should include specific comments on how the Medicare competitive bidding has impacted patient access or your business.

    

March 27, 2013

 

Bakersfield, CA 93302

VIA FACSIMILE: (661) 395-7519

The Medicare bidding process for home medical equipment, which is widely known as durable medical equipment or DME, should be alarming to public officials, disability groups and Medicare beneficiaries. The dangerous and defective program is jeopardizing the health of senior citizens and people living with disabilities, while needlessly forcing businesses to shut down and lay off workers.  

 

It's troubling that instead of focusing on ways to fix this debacle, the program is slated to be expanded to 91 new locations this summer. The bidding process is radically transforming the Medicare system by preventing committed DME providers in our community and across the country from servicing the needs of Medicare beneficiaries. That's right. Instead of increasing competition among DME providers, the program is limiting it.

 

Consequently, there has been a sharp decline in utilization of critical medical services and products, such as oxygen therapy, power wheelchairs and diabetic supplies, which sustain the lives of senior citizens and people living with disabilities.

 

Like the government, the DME sector recognizes the need for an efficient, cost-effective procurement system. We are not opposed to competition or to market-based pricing.  But we need an honest system with transparency. That's not what we have today.

 

DME providers, as well as Medicare beneficiaries, are suffering because the Centers for Medicare and Medicaid Services (CMS) refuse to acknowledge that this procurement system is broken. Thus far, 244 economists, more than two dozen consumer groups, 186 members of Congress, and the National Federation of Independent Business have all concluded that there are serious problems with the CMS bidding process.  

 

Why is there such strong opposition?

 

The process is more like price-fixing than competitive bidding. CMS arbitrarily assigns prices for DME that range somewhere between the lowest and highest bids. This summer, price cuts will average 45 percent for home medical equipment, amounts that in some cases are lower than the provider costs for obtaining the equipment. What really taints the process is that all the bids are non-binding, so a supplier can submit low-bids with no obligation to provide the services or products. But CMS uses all these bids, including the absurdly low ones, to establish its clearing price. Furthermore, the entire process is cloaked in secrecy because CMS never discloses how the clearing prices are determined.

 

This is how Dr. Brett Katzman, Interim Chair of the Department of Economics, Finance & Quantitative Analysis at Kennesaw State University, describes this process: "While the CMS system does involve bidding, it is far from competitive. Yes, there are winners and losers, but winners are chosen based on their willingness to game the system rather than their cost competitiveness. The problem is that the CMS system entices providers to "low-ball" bid whereas a true competitive bidding system would reward providers for being cost efficient."

 

Ashley Medical, Inc., which serves the San Diego area, is closing their doors because of the cuts in reimbursements starting in July. Carol Ashley, CEO of Ashley Medical, Inc, says they made reasonable bids in the process, but didn't win any contracts. After seeing the price cuts, she says that if she did win, she would have declined anyway because she couldn't supply the equipment for such a low price. "CMS appears to be applying bullying tactics on a defenseless DME Industry and the end result will impact the beneficiaries in addition to small business," says Ashley, who has been in business since 1989.  

 

This is happening in our community and across the country.

 

CMS claims it is saving millions of dollars, but some of that so-called savings is merely shifting costs to other Medicare categories. The bidding program is responsible for a steepreduction in utilization of DME by Medicare beneficiaries. But data show that Medicare patients without walkers, power wheelchairs and oxygen therapy require more emergency room visits and longer hospital stays. So while CMS may claim success in reducing DME costs, there will be greater demand for these far-higher-priced categories of care.  

 

We need a system that selects efficient suppliers, establishes pricing that reduces total Medicare costs, and avoids shifting from low-cost to high-cost services.

  

Sincerely,   

   

 

Tony Myrell, CAMPS President 

Owner, Premier Medical Equipment

 

 

 

Rep. Tom Price (R-Ga.) and Rep. Renée Ellmers (R-N.C.) took issue with USA TODAY'S characterization of their work to fix Medicare's absurdly designed bidding program. They wrote:

"USA TODAY's editorial 'Medicare bidding competition in danger: Our view' argued that the current Medicare competitive bidding program is producing 'big savings and has the potential to cut costs even more.' It went on to charge both of us, as co-sponsors of a bill that would fix many of the dangerous and costly practices in this program, as having sinister motives.

These charges are unfounded and serve as a distraction from the dangerous practices being undertaken by the so-called competitive bidding program. This program has morphed into a nightmare of new bureaucratic headaches and unintended consequences. Throughout the country, health agencies, medical supply companies and local pharmacies will all suffer as a result of a bidding process that lacks transparency.

The new competitive bidding process imposes artificial contract prices, permits non-binding bids, and shifts the costs to other Medicare categories-thereby nullifying any of the supposed savings. This is not how a market works.

The goal of this program is to save money and allow the free market to determine prices so that people receiving benefits from Medicare will have the best, most efficient care possible. Unfortunately, due to the way this program has been set up and administered, it is doing the exact opposite."

AAHomecare thanked Reps. Price and Ellmers for their continuing support of the effort to fix the bidding program by making it one that is truly competitive, sustainable in the long-term, and considerate of the patients it serves.