Bid program undermines reform

Friday, November 22, 2013

The Affordable Care Act was supposed to launch an era of smarter, more efficient government health policies and practices, ones that reward innovation, quality care and patient satisfaction. So, it’s disappointing that CMS stubbornly clings to its troubled bidding program to procure DME for Medicare patients in 100 areas across the country.

The mismanaged program is radically transforming the Medicare system by dismantling a network of dedicated DME suppliers. These businesses, large and small, that can no longer service Medicare patients are being replaced by low-bid winners in a process that is based more on working the system than on cost competitiveness.

Is it any wonder that patient care isn’t as dependable when the government’s sole mission is to reduce the prices it pays for critical medical equipment without regard to quality or patient satisfaction?

“The bidding program is jeopardizing the health of Medicare beneficiaries,” says Robert Steedley, president of Barnes Healthcare Services in Valdosta, Ga., and chairman of the board of directors of AAHomecare. “That will be the legacy of the bidding program unless Congress forces CMS to change it. The most vulnerable people in our society can no longer depend on receiving quality products and services.”

What’s more, the bidding program is undermining efforts to bring true reform to the nation’s healthcare system. Experts agree that the delivery of health care must move from a volume-based to a value-based system. In part, that means treating and servicing Medicare beneficiaries in the most cost-effective venue available—their own homes. But instead of increasing access to in-home care, the bidding program is making it harder for Medicare patients to stay out of hospitals and skilled nursing facilities.

Home medical equipment helps patients manage diseases such as COPD and CHF. With DME, patient education and technology, hospital readmissions related to these diseases can be controlled. But these measures are rarely part of the equation when DME is reduced to being a mere commodity, where price is the only concern. The flawed bidding program has removed being paid for performance as part of the discussion.

Joe Sanders, a 71-year-old retiree, is one of many Medicare beneficiaries who have contacted People for Quality Care and told their stories about how the bidding program has jeopardized their health and wellbeing. Joe suffers from limb/girdle muscular dystrophy and uses a power wheelchair and a lift to get out of bed. His doctor prescribed an electric hospital bed that would allow him to sit up, but Joe couldn’t find a provider to deliver one.

“There were no durable medical equipment suppliers in Denton County, Texas, who were granted the right to furnish electronically adjustable hospital beds,” Joe wrote. “The lack of suppliers is causing me great anguish and no one knows where I can get the required equipment…The competitive bidding process should have made certain that all citizens would be served.”

Eventually, Joe gave up on Medicare and found a way to make do: Using money he had saved, he purchased a used bed on Craig’s List. Joe was fortunate that he found a solution to his problem.

But other Medicare beneficiaries aren’t as fortunate. Competition drives quality improvements and controls costs. But if providers are forced by the bidding program to close their doors or choose to no longer serve Medicare patients, there is less competition in the marketplace.

A competitive marketplace where good companies thrive and bad ones readjust or go out of business will bring true reform to our healthcare cost structure. This will not happen in a commoditized market, like the current one under the bidding program, where the number of companies is reduced, providers compete only on price, and health outcomes are ignored. That’s how a patient like Joe is forced to rely on his own meager resources for a hospital bed that Medicare was supposed to supply.

The so-called competitive bidding program isn’t real competition; it’s a cost-shifting proposition that does not deliver quality care.

But this must change. We can’t let the healthcare system desert vulnerable people like Joe; he comes from a generation that fought our wars and helped make America a great nation. We can’t leave them by the wayside. We must have more voices telling our story in Washington, D.C. The DME industry must stand together with AAHomecare and stand strong against this dangerous program.

Tom Ryan is president and CEO of the American Association for Homecare.