Wright & Filippis - Rehabilitative Health Care
Competitive Bidding... and YOU!

ATTENTION MICHIGAN AND TOLEDO RESIDENTS: Please Click Here for Important Information About the Future of Your Home Healthcare

Medicare’s New Proposed Program Will Impact EVERYONE Who Needs Home Healthcare

In recent months, you may have heard about a new program implemented by the Centers for Medicare and Medicaid Services (CMS) for home medical equipment and services (HME) called “Competitive Bidding”.  We would like to take a few moments to inform you about Competitive Bidding because – unless Congress stops this significantly-flawed program – it will ultimately impact everyone who needs home medical equipment and services.

Competitive Bidding and You!What is Competitive Bidding?
Competitive Bidding involves the HME (such as diabetic supplies, medical oxygen, walkers, respiratory devices, hospital beds, wheelchairs, and other medical equipment and supplies) that are prescribed for Medicare beneficiaries for use in the home.  At face value, the concept of a competitive bidding program sounds good, but, in fact, this program as designed actually reduces access to care, patient choice, and quality of care. This is intended to save Medicare money – but those familiar with the phrase “penny-wise, pound-foolish” will immediately recognize its serious shortcomings.

This program selectively contracts with a limited number of homecare providers based on the lowest bid prices.

  • It results in “lowest common denominator” health care for seniors and homecare patients.
  • It forces out providers who utilize high-quality medical equipment or provide critical patient services.
  • It forces certain patients to switch away from providers they rely on and trust.
  • It ignores the provider's ability to serve a geographic market, meaning fewer home visits to patients in rural areas.

Ultimately, the program will result in:

  • Reduced access to equipment service for patients.
  • Reduced access to commonly prescribed products.
  • Fewer resources to set up/adjust wheelchairs, walkers, and hospital beds.

In short, the bidding program restricts access to quality home care for seniors and people with disabilities.

Will Competitive Bidding Save the Government Money?
Instead of saving the government – and taxpayers – money, it will actually increase costs by forcing seniors to extend hospital stays, rather than receiving care in their homes.

  • More expensive, longer hospital stays, since hospitals would have to use multiple HME providers to equip patients they discharge, instead of a single, one-stop provider.
  • Home medical equipment and services represent the most cost-effective, slowest-growing portion of Medicare spending, increasing only 0.75 percent per year. That compares to more than 6 percent annual growth for Medicare spending overall.
  • Home medical equipment represents only 1.6 percent of the Medicare budget.

Won’t Competitive Bidding Increase Competition?
In reality, despite its misleading title, “Competitive” Bidding is actually anti-competitive. We know this because Medicare rolled out this program on a trial basis in a few select markets 2008, and the consequences were alarming.

  • During its trial period in 2008, the vast majority of HME providers were shut out of the program, proving that the bidding program depresses competition and limits patient access and choice.
  • The initial round of bidding eliminated 90% of qualified home medical equipment and service providers from serving Medicare's seniors.
  • It is similar to a closed-model HMO and will have the effect of government-mandated consolidation in the home medical equipment and services sector.

In 2013, CMS will be expanding the bidding program to 91 additional metropolitan areas throughout the U.S., including most areas served by Wright & Filippis.

This badly-designed bid program is opposed by hundreds of economists and dozens of consumer groups. An independent study focused on the patient impact of the Competitive Bidding program for HME, published by Dobson DaVanzo & Associates, predicts many negative outcomes, including fewer choices, reduced access to care, and lower quality products for the Medicare beneficiaries who depend on home medical equipment and services.

The home medical equipment and supplies prescribed for Medicare beneficiaries reduce spending by preventing treatment in higher-cost settings such as hospitals. Data from CMS shows that when Medicare patients don’t use prescribed home medical equipment and services, their use of emergency room and hospital services increases. So while the bidding program may further reduce spending on HME, taxpayers will actually see spending increase dramatically in hospitals and ERs as patients’ options for home-based care continue to shut down.

Home medical equipment and services is already a cost-effective alternative to expensive institutional care and a solution for controlling spending growth in Medicare… but, despite this fact, Medicare is moving forward with a program that reduces access to care, patient choice, and quality of care.

So, what can be done to stop Competitive Bidding?
On March 11, 2011, Congressman Glenn Thompson (R-Pa.) and Congressman Jason Altmire (D-Pa.) officially introduced H.R. 1041, the bipartisan bill to repeal the deeply flawed Competitive Bidding program.

Wright & Filippis, as a member of the American Association for Homecare (AAH), is urging members of the current administration and the Congress to review and rescind this harmful regulatory change.  We have spoken with key Congressional leaders, urging them to review and rescind Competitive Bidding.

And recently, an alternative Market Pricing Program (MPP) has been developed to replace the controversial Competitive Bidding program.  The MPP is based on recommendations by economists and auction experts who have studied the Competitive Bidding program. The MPP would require CMS to make fundamental changes to ensure a financially sustainable program. It uses a state-of-the-art auction system to establish market-based prices around the country. These changes are consistent with Congress’ original intent: to create a program that is based on competition and market prices while maintaining beneficiary access to quality items and services – and that makes it a win-win for taxpayers and beneficiaries.

To protect patient care and patient choice, we would urge you to contact your Member of Congress to ask that they:

1) Oppose “Competitive” Bidding by supporting H.R. 1041, and
2) Adopt the alternative Market Pricing Program.

You can look up your Member of Congress by visiting http://www.house.gov/representatives/find/, or by calling (202) 225-3121.

We want the people we serve to be as informed as possible, and we hope you will join us in our efforts to protect everyone who needs access to quality home health care.

Competitive Bidding-Myths vs. Realities

For more information about Competitive Bidding, visit the American Association for Homecare’s website, http://www.aahomecare.org/.  The American Association for Homecare represents durable medical equipment providers, manufacturers, and others in the homecare community that serve the medical needs of millions of Americans who require oxygen systems, wheelchairs, medical supplies, inhalation drug therapy, and other medical equipment and services in their homes. Members operate more than 3,000 homecare locations in all 50 states.


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