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OAMES Responds to Columbus Dispatch Article on Medicare Bidding

To:            The Columbus Dispatch

Attention:   Ben Sutherly

I read with great disappointment your article in The Columbus Dispatch today “Bidding will lower medical-supplies prices for Medicare patients”.  There is a huge story here but unfortunately it’s not the one you told from what I assume, was a nationally-issued CMS press release.  I invite you to dig into the matter so our seniors and healthcare communities can be informed and get prepared on this critical issue.  There are so many problems with this program which was first piloted in 1997, implemented in 2008  and now set to expand ten-fold, that it’s impossible to be succinct but I hope you take time to explore. 

By way of background, the Congressional objective in requiring the Centers for Medicare and Medicaid Services (CMS) to use a bidding system was to establish “competitive” payment amounts for home medical equipment services (HME or DME, durable medical equipment).   Sounds reasonable, right?  Who doesn’t support competition? Well this program is anything but “competitive” and don’t take the word of the HME community.  According to more than 240 market auction experts, CMS has designed a scheme that is “difficult to imagine a more flawed process” creating artificial, financially unsustainable rates.  Simply put, the government program defies economic logic and common sense by not holding bidders accountable to their bid and not ensuring that bidders are qualified to provide the services/products in the bid area.

In addition to the hundreds of economists, almost 40 consumer and disability groups including the Ohio Statewide Independent Living Council, United Cerebral Palsy, United Spinal Association, nearly 200 members of Congress, and numerous provider organizations including our state association, OAMES, oppose the current bidding system.   Attached is recent letter from Congress to CMS asking for specific information including the consideration of a delay.  This is just one of many letters and bills over the years tackling these issues.   Note that 11 of Ohio’s 16 Congressional representatives signed on to this letter in just a matter of days including Rep. Pat Tiberi and Rep. Steve Stivers whose Congressional districts in Central Ohio are included in Round 2 of the bidding program. 

Given the aggressive rollout of this program, expanding to 100 large cities on July 1 (8 areas of Ohio), one might assume that HME spending is a huge, out-of-control portion of the Medicare budget.  On the contrary, HME represents only 1.4% of the entire Medicare budget, the lowest of any health care sector.   See attached spending chart and note DME is the bottom line.

While we oppose this program, we do not oppose reform and proposed an alternative program in the last Congress (HR 6490) designed by experts with input from providers and homecare advocates and championed by a physician and Congressional representative from Georgia, Rep. Tom Price.  But CMS isn’t interested and time is running out to move it through Congress with a fast-approaching implementation date this summer.  It’s extremely frustrating to watch CMS take this cost-effective home-based benefit “over the cliff”, particularly at a time when value-based purchasing models are emerging and hospitals are penalized for patients who readmit with specified diagnosis after discharge.  Classic right hand, left hand mess.   For years, the HME services industry has played an integral role in getting and keeping patients home and reducing unscheduled visits back to the hospitals or physician offices. This bidding debacle threatens to redefine the HME benefit as we know it, as patients have come to expect it and as the health care market demands it.   

CMS announced on Tuesday the list of contract suppliers for the 91 new bid areas.  OAMES is currently analyzing this data to understand the impact on Ohio.  I’ve conducted some quick analysis and have learned for example, that in Columbus, an 8-county bidding area, there are 29 contracted suppliers for oxygen services. There are 12 companies within a 50 mile radius of the central point of the bidding area (downtown zip code 43215).  The next 17 contract suppliers are located between 72 and 2,564 miles away some of which are in California, Texas, Florida, North Carolina and Tennessee.  This is life-sustaining respiratory services!  Let’s look at walkers:  there are nine suppliers in the Columbus bid area, two of which are within 33 miles of the bid area and seven that are located from 107 to 1,155 miles away in Kentucky, North Carolina and Texas.  Given 80-90% of local providers are no longer able to serve Medicare beneficiaries, and given the distance from the bid area that many of the contracted companies are, one has to question how timely discharges will be, repairs, service calls, etc.  And that’s the care/service question.  What about the impact on jobs for the companies in these bid areas who are no longer able to provide these services to seniors in their communities?

I do apologize for being long-winded but this issue, while small in the context of the daily news cycle, is massive for many businesses and consumers affected by the controversial Medicare program.  Bottom-line, this is a destructive, non-transparent government program that will harm Ohio’s elderly and disabled, destroy the homecare/HME infrastructure that these consumer depend on, crush innovation and technology, and shift costs from cost-effective homecare services to more costly acute care.  Please do your readers a service and shed light on this damaging program.  I’d be happy to provide further information and detail.


Kamela Yuricich, Executive Director

Ohio Association of Medical Equipment Services  

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