Feds, suppliers spar over required bidding for medical equipment

Job losses blamed on competitive bidding in Obama-backed plan

tgoldsmith@newsobserver.com May 5, 2012 

Proponents of new Medicare rules say they will end practices such as marketing and sales of motorized scooters to people whose doors aren’t wide enough to get the devices inside.

But opponents say the rules, long in the making and backed by the Obama administration, will needlessly burden business and deny access to some older people.

“We understand the need for cost reduction, no doubt,” said Beth Bowen, spokeswoman for the N.C. Association for Medical Equipment Services, a trade group. “Our industry would like to be able to show you how we can reduce the cost, not just have more regulations slapped on the industry.”

The Centers for Medicare and Medicaid said that new Medicare rules will hold sway in Raleigh and Durham in January. They new rules have been tested in a pilot program in the Charlotte area and nine other cities.

The new procedures include competitive bidding, traceable ID numbers for suppliers and additional regulations to reduce expenses and fraud in dispensing diabetes equipment, motorized scooters and other “durable medical equipment.”

Federal officials say taxpayers saved more that $200 million during the trial, and should save $25.7 billion between 2013 and 2022. People who receive the equipment should save as much as $17.1 billion on reduced copays, the agency said.

Some public-health advocates say that competitive bidding can only be healthy and represents one of many impending changes in Medicare

“The days of Medicare paying for absolutely everything are over,” said Adam Searing, director of the nonprofit N.C. Health Access Coalition. “There are going to be a lot of changes besides competitive bidding on durable medical equipment that are meant to help the program.”

Medical suppliers, represented by the trade association, are pushing hard against the rules. The group counts U.S. Rep. Renee Ellmers, R-2nd District, a nurse, as a backer and threw an event in her honor March 15 in Dunn.

“She understands our concerns much better and (is) committed to supporting reform of the competitive bid process,” said Joey Tart, of Family Medical Supply in Dunn. “The job losses created by competitive bidding were disappointing for her to hear, as well as the lack of suppliers that will be left to service the beneficiaries in North Carolina.”

The industry would like to replace the bidding process with an auction where suppliers can bid for contracts. In addition, members would like to bid in two product categories instead of as many as 10.

Gina Upchurch is director of Senior PharmAssist a Durham nonprofit that helps older people with prescription drugs and other care. Medicare officials will have to be careful not to impose such strict regulations that small businesses are driven out of business and older people find it harder to receive equipment, she said.

“Chains are more likely to win in the bidding process,” said Upchurch, who generally favors Obama’s Affordable Care Act.

The administration effort known by its critics as Obamacare aims to slow the growth in Medicare, not cut the overall program, Upchurch said.

Federal administrators brushed aside the suggestion that beneficiaries will suffer from the change in how companies are paid for medical equipment.

“There have been no negative health care consequences to beneficiaries as a result of competitive bidding,” the agency said.

In the Charlotte test, 19 suppliers of motorized wheelchairs reduced prices by 18 percent. The use of such devices has led to investigations for years, with convictions in California and other states of unscrupulous sellers who pursue clients directly, then send information to physicians for their signatures.

“Any kind of website or publication where seniors are expected to go, you see ads for companies that offer to sign you up for a motorized wheelchair absolutely free,” Searing said.

Bowen doesn’t deny that, given a large number of suppliers, some might take part in the delivery of a wheelchair to a house too small to handle it.

In 2010 a federal judge sentenced Raleigh resident Kalu Kalu, indicted along with two other people, to eight and a half years in prison and restitution of more than $4 million for billing Medicare fraudulently for more than $12 million in durable medical equipment.

“The defendants would still bill Medicare for DME that was denied by the physicians, that was not medically necessary, that was not requested by the patient’s physician, or, in some cases, that was not the correct item or that was never delivered to the patient,” the U.S. Attorney’s office said.

Goldsmith: 919-829-8929

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