'Minority, poor beneficiaries being used as guinea pigs'

Sunday, April 15, 2007

WATERLOO, Iowa - The VGM Group criticized CMS's plan for national competitive bidding sharply last week, claiming the program disproportionately targets poor and Latino beneficiaries.

After analyzing U.S. Census Bureau data, VGM concluded that people living below the poverty level in the initial 10 competitive bidding areas range from 13% (Charlotte, N.C.) to 32% (Cleveland). Across these 10 areas, the poverty level is 19%, compared to 13% nationally. The Census data also reveals that 31% of the population in the first 10 bidding areas is Latino, compared to 15% of the country's population nationally.

VGM plans to send a press release with this data to its members in the 10 bidding areas, said Mike Mallaro, VGM's CFO/CIO.

"If they feel outraged and troubled by this, we're encouraging them to use the press release to contact their local TV and newspaper," Mallaro said. "This doesn't make sense and if the public understood what was happening, they'd never stand for it."

In a press release issued Thursday, VGM stated: "Minority and poor beneficiaries are being used as guinea pigs to test the government's theory that 'competitive bidding' for nine product categories will result in savings to Medicare."

In related news, VGM promised to support beneficiary lawsuits being prepared to derail competitive bidding.

Currently, beneficiaries in two of the first 10 competitive bidding areas have expressed interest in suing CMS to stop the reimbursement cut in their communities, said Jim Walsh, VGM's general counsel.

The legal case against competitive bidding hinges on the argument that it creates a two-tiered Medicare system. Beneficiaries in traditional fee-for-service areas continue to enjoy a wide range of products and providers. That's not the case in competitive bidding areas.

"The winners in this race are the ones who provide the cheapest products and the worst service," Walsh said.

It's a myth, he added, that good providers with efficient operations can win a bid and continue to offer high-quality equipment and services--even if they want to.

"Believe me, you've got places in the country right now, 10 of them that I can think of, were providers are sitting down in their board rooms and saying, 'What can we take away from beneficiaries so we can stay in business?'" he said.