Medicare: Who’s scamming who?

Tuesday, September 30, 2008

After reading Department of Health and Human Services Secretary Michael Leavitt’s opinion letter titled “Will Congress Continue a Medicare Scam?” I feel I must respond to the outrageous comments he directed against the home medical equipment industry. There is a scam alright. The scam is his attempt to compare fees paid for the provision of home medical equipment to pricing available from Internet resellers. If he thinks the Internet is so great why not just send Medicare beneficiaries to the Internet for their equipment? They could send him their receipts and he could reimburse them directly. Of course that will never happen.

The fact is that the fees paid for medical equipment must cover a lot more than the simple acquisition of hardware. In order to be competitive, HME providers must provide high quality products and service, and do so in an increasingly hostile regulatory environment, which increases operating costs for everybody. The scam is that Secretary Leavitt would have us believe the Medicare program is held hostage to a bunch of overpaid greedy providers getting automatic cost of living increases each year. The reality is we have not received any cost of living adjustments in recent memory but have endured deep cuts to reimbursement required by every Medicare bill passed by Congress for years. During this period, while the cost of an oxygen concentrator may have come down, the savings have been more than offset by the increased cost of every other aspect of providing it.

The biggest scam is the so called competitive bidding program, which has nothing to do with the fair market price of anything and everything to do with kicking 70% to 80% of the provider community out of the program for the convenience of CMS. In exchange for saving a few dollars a month on co-insurance, beneficiaries will give up their right to select a provider of their choice and therefore loose their market power. This will result in low quality and poor service dictated by cut-throat bids. Many beneficiaries have supplemental insurance and don’t pay the co-insurance, anyway. Does anybody think they will see a reduction in their premium? This is nothing more than forcing the provider community to submit to a process of extortion in exchange for the privilege of trying to stay in business.

Notwithstanding any competitive bidding program, Congress had, has, and will always have control over the fee schedule for HME as demonstrated by the 9.5% cut we must accept in exchange for a delay to competitive bidding. At least we still have the freedom to take it or leave it. The docs said “leave it” to the 10.5% cut they were in for and we can all see the result of that.

When are we going to wise up as a group? There’s a Medicare scam alright, but who’s scamming who, Mr. Leavitt?

Don Chrysler, president and CEO, National Home Health Care, Amarillo, Texas