Don't know what to say about market pricing?

People For Quality Care provides Cliff's Notes
Monday, April 23, 2012

As we reach the one-year anniversary of pushing H.R. 1041 to eliminate competitive bidding, we now need all of our allies to include the market-pricing program (MPP) in their conversations to Congress. Whether you have a strong understanding of MPP or haven’t yet grasped the concepts, it’s important to communicate how the proposed program will promote better access to quality equipment and service. Speaking out at every opportunity has the potential to multiply one conversation by thousands.

The challenge is in what to say about MPP. What is MPP? While we can fight for support for H.R. 1041, members of Congress are always looking for a more realistic approach. “Yeah, we understand this program is bad, but how can we fix it while keeping cost in mind?” they ask.

Given this charge, the homecare industry went to work to develop a program that would still cut costs for Medicare, while doing a better job of protecting the beneficiary’s option to choose the provider who serves them the best. This will keep more providers open for business with more product variety and focus on customer service. 

We’re asking for all of those who contact Congress asking for the repeal of competitive bidding to mention MPP as a viable alternative. Is it really a viable alternative that will help beneficiaries while maintaining a stable industry as a service to the elderly and disabled? The answer is yes. Here are three talking points to explain:

•Providers who won the bid must provide you products.

•The initial auction process to determine who can supply HME and oxygen to beneficiaries is an extremely complicated process that has been denounced by 244 economists as a flawed method of doing business. One of its greatest flaws is that a provider who wins a bid to supply a certain product and service is not bound to actually provide that service. In other words, the existing competitive bidding rules do not require a bid-winning provider to stick with the business. This is the primary reason we saw ridiculously low bids for some areas during Round 1.

•PFQC received many complaints from beneficiaries in competitive bidding areas who could not find a Medicare-approved provider to serve them. Part of the problem was that some bid-winning providers were not fulfilling their contracts, leaving few providers to serve many beneficiaries. MPP will put an end to that by requiring providers to fulfill their contracts. This is good news for beneficiaries and providers. 

Under MPP, your local provider can stay in business

It’s evident all over the country that competitive bidding is detrimental to homecare providers. Who has been hit the hardest? Your local, community-based HME providers who have served their communities quite well for many years. They are being forced to close. There is a valid argument out there that local is better, and we believe that to be true. Local providers have strong ties to their community, making service personal and business reputation a big deal. In the current auction process, bid winners are located all over the country. Every major HME product category is bid on in each major metropolitan area, with limited bid winners for each product. As a result, beneficiaries and clinicians might be forced to call up to five providers for the multiple products needed.

Under MPP, only two product categories are bid per metropolitan area

The remaining products will adopt the price submitted by bid winners in other areas of equal size, keeping costs low. However, all providers who are Medicare-certified will have the opportunity to sell and service the remaining products to beneficiaries. This means your provider will maintain the opportunity to serve you many products and get to compete based on quality service. You will maintain the choice to stay with your local provider or have the choice to find a new one. After all, you, your caregivers and doctors should be the ones to choose what equipment is best for you, not a Washington bureaucracy.

Prices make more sense

Everyone is in agreement that this is a time to save money, while maintaining quality products and service as an option for beneficiaries. This is why the homecare industry offers MPP as a solution to the Medicare competitive bidding problem. But setting prices must be fair for all involved. Just like the cost of a gallon of milk in Denton, Texas, will vary from the cost of gallon in New York City, the cost of medical equipment varies by region. MPP program will do a better job of accommodating variations throughout the country, so that smaller communities are not charged the price of equipment in big cities. hme

Beth Cox is the communications and marketing specialist for People For Quality Care, the advocacy division of The VGM Group. Reach her at or 888-544-7913.