Well, CMS is at it again. In their zeal to reduce overall costs, the Centers for Medicare and Medicaid Services (CMS) is pushing forward with their ill-conceived and poorly-implemented “competitive bidding program” on durable medical equipment (DME), oxygen and certain medical supplies. What will this mean for the average person who gets durable medical equipment and supplies through a CMS contract? They will lose their choice of vendors, have limited options for products and services and likely have higher long-term costs. This is government efficiency at its best. Let me explain.
The pricing for wheelchairs and other medical equipment and supplies that you rely on were released just a couple of weeks ago by the CMS. On average, CMS cut product costs by 45 percent and it cut pricing for diabetic testing supplies by 72 percent. In these severe fiscal times, this seems good, right? It’s not.
Under the competitive bidding program, CMS publishes the price that it’s willing to pay for certain categories of items. Suppliers then submit bids to CMS to provide product categories at costs below the CMS set price. The winning supplier gets the privilege of providing their choice of product categories in a geographic region for a certain period of time at the lowest agreed-upon cost. The lowest cost from a supplier per category that can meet beneficiary demand wins. CMS artificially sets the maximum cost it’s willing to pay and then bidders fight their way to establish the lowest cost. Almost seems like responsible government at work. Except…
CMS is not implementing competitive bidding on paper clips or other items that are interchangeable or that don’t have a dramatic impact upon beneficiaries when they don’t perform well. It’s implementing this program on frail, elderly and disabled beneficiaries who require wheelchairs; walkers; oxygen therapy; enteral nutrients (tube feeding); continuous positive air pressure (CPAP) and respiratory assistive devices; hospital beds and support surfaces; wound therapy pumps and related supplies and accessories; as well as mail-order diabetic supplies. When these items fail (as they invariably will when the lowest price drives the selection), people get hurt.
The CMS competitive bidding program makes the assumption that items in each category are interchangeable. It makes the assumption that relationships with the vendor or suppliers have no medical or cost benefit. It makes the assumption that vendors and suppliers who didn’t win a bid will be in business to compete in later rounds of bidding. Those local vendors and suppliers who don’t “win” a bid will struggle in the absence of any customers through CMS. This will create regional monopolies, which will undermine any savings in future bidding rounds. Competition in the marketplace is key to long-term savings, quality and service.
People who depend on CMS for durable medical equipment and supplies should be afraid. The first round of competitive bidding was implemented in nine areas in January 2011. This July, 91 additional areas around the United States will be swept into the competitive bidding arena. Round two will include large metropolitan areas like Los Angeles, CA (including Long Beach and Santa Ana); Chicago, IL (including Indiana and Wisconsin); and New York (including northern New Jersey and Pennsylvania.
In short, the current bidding program restricts access to, and choice of, durable medical equipment products and services by forcing consumers to use a restricted number of items regardless of whether or not those items are the most clinically appropriate or not. When those products and services fail, as they most likely will when provided at an artificially derived bid price, then the costs will shift from durable medical equipment and supplies to hospitalizations and increased medical visits. Sure, CMS’ DME costs will go down, but CMS will be unable to track the corresponding rising costs in other budget areas.
Specific complaints raised by you so far, in a United Spinal wheelchair survey, include concerns about medical equipment contracted suppliers being too far from home thus restricting supplier choice (in particular, consumers’ preferred choice of a trusted, long-term supplier), equipment delivery delays, incorrect products provided, and difficulty contacting suppliers and obtaining repairs from contracted or non-contracted suppliers.
Consumers, physicians and clinicians agree that the current bidding program is disrupting the continuum of care by restricting consumers from going to their providers of choice in order to receive the appropriate products and services that they need.
Coverage for medically necessary products and services would give our community the right to fully participate in society and live active, productive independent lives with access to employment, educational and social opportunities. Without the right DME products and services, our ability to access the community is significantly limited and restricts our going to work, school or places of worship, physician visits and other medical services as well as taking care of grocery shopping or other activities associated with independent self-care or care of dependents such as young children or aging parents.
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