Changes in Medicare HME Benefit

August 22nd, 2011 by @lamberts

The Centers for Medicare & Medicaid Services (CMS) is implementing a program nationwide that will severely impact your Home Medical Equipment (HME) benefit in serious ways. We all would like to see smarter government spending, but this program, ironically titled “Competitive Bidding”, deviated significantly from what Congress sought to achieve (market-driven prices and healthy competition from a vast network of HME companies). Instead, this program achieves none of those things due it its serious design flaws that artificially lower prices to unsustainable rates, arbitrarily pick “winners” and “losers” without transparency, increase expenditures in Part A of Medicare, and jeopardize seniors’ access to quality care from their chosen home medical equipment company.

With this program, a small number of suppliers with the cheapest bids (and little regard to quality, service, experience, financial health, or presence in the community) win the exclusive ability to sell durable medical equipment to Medicare beneficiaries. Closer inspection to this program reveals a poor design with significant detrimental consequences; therefore patient advocacy groups, economists, auction experts, and homecare equipment companies have challenged CMS and Congress to repeal this particular program before irreversible harm occurs.

The current program is fraught with serious and consequential problems that will wreak havoc on elderly and disabled Americans and small businesses like Lambert’s throughout our great country. The controversy over this program is growing, and on Friday, CMS announced that all 4 of Tennessee’s major cities and surrounding towns will be on the chopping block in early 2013. This will affect all of Lambert’s patients living in Knoxville, Lenoir City, Maryville/Alcoa, Oak Ridge, Powell, Clinton, Loudon, Townsend, Corryton, and 17 other cities close by.

Key issues with this program design include: lack of long-term sustainability, lack of transparency, a flawed pricing rule with non-binding bids, endangerment of seniors, and creation of mass genocide in the Home Medical Equipment Industry by eliminating 90% of companies like Lambert’s nationwide. A failed program of this magnitude will destroy the home medical equipment supplier network for years to come, with an estimated 200+ companies closing and direct job losses of over 2,100 in Tennessee alone.

Want more information?  Read these Myths of Medicare’s Competitive Bid Program.

A study conducted by Dobson & DaVanzo revealed:

  • Diminished freedom of choice in your provider,
  • Limited options in types of equipment and brands available,
  • Access issues to quality equipment and services,
  • Delayed response time in receiving goods/services,
  • Increase in emergency room visits and delays with discharge,
  • Stifled technological innovation for equipment,
  • Disruption in long-term relationships with your provider & continuity of care issues

**Many private insurance companies follow Medicare guidelines, so it is important that you learn about this and how it could impact you even if you do not have Medicare.**

Patient advocacy groups stand united with economists and auction researchers against this ill-conceived program. It hurts people, it hurts small (and even large) business, and it will negatively affect the economy, with predictions of reduced investment of 12-15% annually ($3.1 billion between 2011 & 2020) in the homecare equipment industry.

244 of our country’s most prestigious economists from Princeton, Harvard, Yale, UCLA, Stanford, and more have joined together in 2011 in protest of this program, citing that it is plagued with “bureaucratic inertia” and that CMS’ failure to resolve the serious and consequential problems with this program are “especially distressing and unreasonable”. In 2010, 167 of these individuals wrote the Chairman of the Subcommittee on Health about the four main design problems of this program, stating “implementation of the current design will result in a failed government program…The current auction program has flaws that need to be fixed before it can achieve the objectives of low cost and high quality“. The Chairman promptly took this letter to CMS, asking how they would resolve it. CMS blindly dismissed these serious concerns and assert that CMS as a bureaucratic department knows more than these esteemed experts in auctions and economic impact. The New York Times Freakonomics Blog by Ian Ayers and Peter Cramton criticized CMS, stating, “Any expert would be able to quickly identify the fatal flaws in the Medicare competitive bidding program. We suspect the problem is that CMS initially did not realize that auction expertise was required, and once they spent millions of dollars developing a failed approach, they stuck with it rather than admit mistakes were made“.

Patient advocacy groups against this bid program include:
The ALS Association
American Association for People with Disabilities
Cerebral Palsy Association of Ohio
Muscular Dystrophy Association
National Association for Home Care & Hospice
National Council on Independent Living
National Emphysema/COPD Association
National Spinal Cord Injury Association
United Spinal Association
…and more…

Contact your elected representatives and tell them how:

  • You do not want Competitive Bidding for HME in your town,
  • You want freedom to choose your home medical equipment company, not bureaucratic employees in Washington,
  • A radical reduction in HME companies through the Competitive Bidding Program hurts the economy and will cause massive job loss,
  • Continued cuts to homecare benefits could force suppliers not to carry the same quality brands of equipment that you need to maintain your activities of daily living,
  • You do not want to be forced to use different companies for each different product you need

I’ll leave you with a quote from Jerald Winakur, MD, FACP, CMD:

“CMS has developed a hodge-podge response to the needs of our citizenry… By its actions, Medicare stifles innovation, discourages physician participation in the program, and–most egregiously–restricts the autonomy of elderly and disabled citizens, the very ones it is the mission of CMS to help.  And, paradoxically, CMS ends up spending more money, not less, in the long run.  This is shameful behavior that deserves the transparent light of day shone brightly upon it.”


One Response to “Changes in Medicare HME Benefit”

October 20, 2011 at 9:06 pm, Lorrie said:

I’m glad I ran across this, it made me think.


Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.