DHS sounds bullish on NCB, but raises some concerns

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Thursday, October 31, 2002

WASHINGTON — Although the U.S. Department of Health and Human Services' second annual report to Congress on competitive bidding sounds generally bullish on opportunities for savings, opponents of competitive bidding say the report also rings alarm bells that should check a headlong rush toward the new reimbursement paradigm.

The report, released Sept. 12, concludes that competitive bidding, as tested in Polk County and San Antonio, "can meet Medicare's objectives in terms of program savings, maintaining access and quality, preserving competition in the DMEPOS markets and administrative feasibility."

The evaluation team from the Research Triangle Institute and Northwestern University first surveyed Medicare beneficiaries in Polk County in March- June 1999, three months before the demonstration policies took effect. The team did so again in April 2001, allowing a year of beneficiary experience under the demonstration. As a means of comparison, the evaluators also surveyed Medicare beneficiaries in nearby Brevard County.

Generally, the report found that competitive bidding did little to alter seniors access to care. The percentage of Polk Couny oxygen users who relied on oxygen concentrators jumped from 91% to 94% with a similar change in Brevard County.

The percentage using both an oxygen concentrator and a compressed gas system went up from 5.6% to 9.6%. The report found little change in the use of liquid systems in the county. Overall, the quality of oxygen and medical equipment supplies got high marks from beneficiaries. On a scale of 1-10, beneficiaries rated oxygen suppliers 9.25 and medical equipment suppliers slightly less in terms of quality.

Although the number of seniors receiving portable oxygen as part of their oxygen service in Polk County declined about 10% overall — a figure evaluators deemed statistically insignificant — the number of new users receiving portable oxygen declined by 34%. The evaluators believe this decline is worth monitoring.

AAHomecare's Asela Cuervo characterized the drop in portable oxygen service as alarming. "The way the report couches it, portable oxygen is a quality of life issue," she said. "But it's far more than a quality of life issue. Without the ability ambulate, you're more likely to die. Portable oxygen really extends life."

Using a regression analysis, the evaluators found the prevalence of new oxygen users on portable systems dropped from 76% to 54% in Polk County. In Brevard County, using the same analysis, the figure rose from 58% to 62%.

Butch Vanderpool, one Polk County provider of home oxygen therapy, believes the decrease in the use of portable systems in Polk County has less to do with competitive bidding and more to do with a change in the way Medicare qualifies beneficiaries for portable oxygen therapy.

When the rules changed in the first quarter of 1999, and providers could no longer use an overnight oximetry test to qualify patients for portable systems, Polk County took a hit, he said. While Polk County is rural, Brevard is more metropolitan. Vanderpool said the drop in portable oxygen use among new users in Polk County was associated with the difficulty that attends getting patients qualified.

Another troubling finding, according to Cuervo, is the shift in medical equipment delivery. Surgical dressings beneficiaries have had substantially less contact with their suppliers. New medical equipment users were less likely to have their orders delivered by suppliers.

"This year, [the surveyors] actually identified a couple of things that weren't apparent the first year they did their analysis," said Cuervo. "That in and of itself warrants caution. It takes time for these issues to become apparent." HME

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