Home health suppliers and providers expressed serious concerns last week that a new program from the CMS will compromise both access and quality for patients who receive care at home.
Critics lambaste CMS' Medicare bidding program
This month, the CMS announced the first round of a competitive bidding program that will be used to set the price that Medicare pays for durable medical equipment, prosthetics, orthotics and supplies. In doing so, the program will replace Medicare's existing fee schedule amounts with market-based prices, and, according to the CMS, will allow beneficiaries in Charlotte, N.C.; Cincinnati; Cleveland; Dallas; Kansas City, Mo.; Miami; Orlando, Fla.; Pittsburgh; and Riverside, Calif., to see lower prices for supplies beginning Jan. 1, 2011.
But while the CMS is touting the program as a huge money-saver—the agency estimates it will save $17 billion over 10 years with an average of 32% off the current cost of items—others have referred to the process as “suicide bids” that will result in putting companies out of business and harming the quality of care.
“Any winning bidder will have to make drastic reductions in staff,” said John Reed, executive vice president and chief operating officer of Pro2 Respiratory Services in Cincinnati. “We're estimating that about 100,000 jobs would be lost,” he said, quoting a figure from the American Association for Homecare about the number of expected labor cuts because of the closing of small businesses. “If you win the bid, you're cutting your staff in half,” he said. “If you lose, you're laying them off.”
Referring to the process as a “price-point free-for-all,” Reed said there are only a handful of line items that his company can target for savings, which, in turn, could endanger patient care. These include capital equipment, which would mean companies would continue to use aging, fragile equipment; disposable supplies, which would result in choosing the cheapest rather than the best supplies; and labor, which would mean a loss in staff who administer to patients.
Reed's concerns were echoed by Michele Quirolo, president and CEO of the Visiting Nurse Association of Hudson Valley in Tarrytown, N.Y., which is a member of the National Association for Home Care & Hospice. “There are a lot of unknowns in it, but I think it could limit access to medically necessary products and services that the home medical equipment providers provide to home health agencies,” Quirolo said. “How do they come in with a lower bid, given that costs are rising? It's usually reducing or eliminating product lines,” she said.
“When new things come up,” Quirolo added, “are you going to be able to provide it, or is it the old equipment because it's cheaper?”
The DME competitive bidding program was established by the Medicare Modernization Act of 2003 and was implemented for a short time in 2008 before the Medicare Improvements for Patients and Providers Act of that year ended the supplier contracts, temporarily delayed the program and made changes.
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