Bidding Program Will Put Durable Medical Equipment Providers Out of Business and Disrupt Services to as Many as 174,000 of Seniors in the Charlotte Area
ARLINGTON, Va., April 7, 2008 /PRNewswire-USNewswire/ -- A new Medicare bidding program for durable medical equipment (DME) scheduled to be implemented in the Charlotte, Gastonia, and Concord areas of North Carolina on July 1, 2008, will put many DME providers out of business and could disrupt services for many of the 174,319 seniors and people with disabilities in the area who are eligible for Medicare.
In late March, DME providers in North Carolina received letters from the Centers for Medicare and Medicaid Services (CMS) explaining whether they had been offered a contract, been disqualified from bidding, or bid outside of the bidding range for a product. Those DME providers that did not receive contracts for a given Medicare item or service are shut out of the Medicare program for three years.
The American Association for Homecare has received word from hundreds of DME providers who say they have been improperly disqualified and thereby removed by CMS from the bidding process. That includes at least 10 cases of improperly disqualified bidders in the Charlotte, Gastonia, and Concord areas.
"I am hearing story after story of providers who were unfairly disqualified," said Beth Bowen, executive director of the North Carolina Association of Medical Equipment Services. "In providers' follow-up conversations with the proper authorities, they seem to get no help and those who did receive contracts are skeptical about not only the pricing but the language used in those contracts."
The congressionally mandated competitive bidding program was designed to reduce the number of homecare providers and reduce reimbursement rates for oxygen therapy, hospital beds, wheelchairs, and other types of home-based equipment and care in Medicare. Reimbursement rates are already set by Medicare and reimbursement rates for oxygen have already been cut by nearly 50 percent over the past 10 years. The DME industry has long argued that this new program will needlessly punish established, high-quality providers, reduce the DME industry's focus on service, and harm patient access to care.
The DME industry consists primarily of small to medium-sized businesses serving relatively small service areas. The average DME company receives about 50 percent of its business from Medicare patients. Loss of this business will result in layoffs and business failure for many DMEs.
"The Secretary of Health and Human Services has called home-based healthcare 'radically' more efficient than institutional care, yet the federal government is determined to aggressively dismantle the nation's homecare infrastructure at a time when our healthcare system needs it the most," said Tyler J. Wilson, president of the American Association for Homecare. "DME spending is the smallest sliver of Medicare, less than two percent of spending, and is the slowest-growing segment. Taxpayers may ultimately face higher costs as hospital stays lengthen due to more complicated hospital discharge logistics, more emergency room visits, and cost-shifting from Medicare Part B to Part A services."
The American Association for Homecare is pursuing regulatory, legislative, and legal remedies to allow for review of the cases of those DME providers that have been disqualified and is calling for the suspension of the first round of the bidding program until questions about patient access and harm to DME providers can be fully assessed.
The American Association for Homecare (AAHomecare) represents providers of durable medical equipment and related services and supplies as well as equipment manufacturers. AAHomecare members serve the medical needs of millions of America