GAO looks into competitive bidding for HME manufacturers

Thursday, April 22, 2010

WASHINGTON - Government bureaucrats kept an "open mind" last week as they listened to industry officials explain why competitive bidding for HME manufacturers would be a bad idea.

"It was a really good meeting," said Cara Bachenheimer, Invacare's senior vice president of government relations. "There were open minds ready to suck up information. They said, 'We don't know how it would be structured. We're trying to figure out how the industry works, how products move.'"

The Government Accountability Office (GAO) is in the beginning stages of developing a report that evaluates the pros and cons of a competitive bidding program for HME manufacturers. AAHomecare and other industry stakeholders explained that providing HME to beneficiaries is more complicated than just buying a piece of equipment. They pointed out that:

--    Home medical equipment is not like buying a car. One size does not fit all, and competitive bidding for HME manufacturers would limit access to equipment that meets a patient's individual needs.

--    Manufacturers are not equipped to bill Medicare and deliver products direct to beneficiaries; HME providers are critical to the supply chain.

--    Product cost is only a small portion of the overall cost of providing equipment to Medicare beneficiaries.

California's Medicaid program, Medi-Cal, encountered those issues firsthand last year when it considered a competitive bidding program for manufacturers of manual wheelchairs.

"It sounds good when you are sitting in a staff meeting, but once they were educated on the significant differences in the products, and the level of evaluation and documentation that was necessary, they concluded it wasn't worth moving forward," said Seth Johnson, Pride Mobility's vice president of government affairs.

After the meeting, AAHomecare arranged for the GAO officials to tour Roberts Home Medical in Germantown, Md.

"The site visit wasn't to touch on manufacturer bidding," said Walt Gorski, AAHomecare's vice president of government affairs. "It was to show how a product comes from a manufacturer and gets to a patient. If a federal agency is going to produce a report on HME, the analysts must see an actual homecare practice firsthand."