AAHomecare leads new coalition in fight against competitive bidding

Wednesday, July 31, 2002

WASHINGTON - Calling competitive bidding a complex, bureaucratic scheme, a new coalition led by AAHomecare has rallied in opposition to congressional and administrative interests to put durable medical equipment out to bid nationwide.

"We're coming together to show Congress that there's a lot of opposition to this," said Tom Connaughton, CEO of AAHomecare, who'll chair the Coalition for Access to Medical Services, Equipment and Technology (CAMSET). "It's not just homecare providers who are running around screaming."

The coalition includes 20 different advocacy organizations, including trade groups such as AAHomecare and the National Association for Homecare, and consumer groups such as the Paralyzed Veterans of America and the Consortium for Citizens with Disabilities Health Task Force. CAMSET plans to meet every Monday.

The coalition is arguing that national competitive bidding will undermine quality of care, restrict patient choice of service providers, stifle the development of new technology and drive small businesses out of operation.

Making a case to halt passage of a Senate bill that would launch the bidding, CAMSET cites recent GAO testimony before Congress where the accounting office says the positive results achieved in the demonstration projects may be "neither applicable nor practical on a wider scale."

The coalition also quotes a CMS position that states that it's premature to declare that competitive bidding is either an appropriate or inappropriate reimbursement mechanism.

But Mark Wynn, who directed the demonstration projects for CMS, said Medicare's analysts now believe competitive bidding is workable nationwide.

"The evidence from the actual demonstrations shows that it works," he said.

At AAHomecare's Legislative conference, Wynn told attendees about a soon-to-be-released survey from Polk County which found no difference in patient satisfaction as reported by Medicare beneficiaries in 21 of 23 categories. In the other two categories beneficiaries reported more satisfaction.

CMS is finalizing preparations for the report's release to Congress.

Wynn also takes exception to industry charges that competitive bidding limits patient choice and drives small businesses out of operation.

"We have bent over backward to make sure that small businesses can compete on a level playing field with much larger business," said Wynn. "Three quarters of the winning businesses [in Polk County] were small businesses."

At the AAHomecare Legislative Conference, the scuttlebutt was that Lincare had garnered a near 70% share of the oxygen business in Polk County with most of the remaining business going to Healthcare Diagnostics.

Wynn said that market share report was wrong, and that Lincare, although the majority supplier, had taken less than 50% of the oxygen business in the county.

Wynn said the data shows that competitive bidding, after you back out administrative costs and start-up costs, saved Medicare nearly $4 million in Polk County. Nationwide, he expects the administrative costs of running a competitive bidding program to equal 8% of the savings.

Connaughton thinks competitive bidding's projected savings of $7.7 billion over 10 years (See HME News, July 15, 2002) is illusory.

"There's going to have to be a huge bureaucracy that'll have to decide whether there's sufficient competition for each product in each geographical area so they end up with multiple bidders," said Connaughton. "I don't know what the costs of that bureaucracy are going to be, but they'll be huge." HME