On May 6, the House Ways and Means Committee held a hearing on Medicare's Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program. Subcommittee Chairman Pete Stark (D-CA) stated the hearing took place because the Subcommittee had "heard from both suppliers and beneficiary advocates that the DMEPOS competitive bidding program is not working as well as it is supposed to." The Competitive Bidding Program is scheduled to be phased in throughout 10 metropolitan areas in 2008.

As to the benefits and savings of the bidding program, Kerry Weems, Acting Administrator for the Centers for Medicare and Medicaid Services testified that Medicare has a history of paying more for goods than non-Medicare consumers. The pilot bidding program to take place in July of 2008 will enact a new rate for the program area based upon winning bids, with the goal of reducing Medicare spending costs.

Kathleen King, Director, Health Care, of the General Accounting Office (GAO), testified that the bidding program could reduce payments through inducing suppliers to accept lower rates. King emphasized that oversight needs to be implemented as suppliers might counter the reduced rates through cutting costs-by providing lesser quality equipment and fewer services to beneficiaries. In a previous project demonstration the GAO reviewed, there were indications of fewer home deliveries and routine maintenance. The GAO had recommended in 2004 that CMS monitor beneficiary satisfaction for problems with suppliers or equipment.

There was also testimony that the program would incur serious problems in DMEPOS business and in quality healthcare for beneficiaries. Tom Ryan, President and CEO of American Association for Homecare, a national trade association representing both providers and manufacturers of durable medical equipment, stated that the Medicare bidding program is "poorly conceived and fundamentally flawed." Ryan went on to explain the program will reduce the number of service providers and that 63 percent of accredited and qualified homecare providers that submitted bids have been disqualified thus far. Ryan's position is that the small and mid-sizes business will lose 40-50 % of Medicare business as a result of the bidding program and will be forced to layoff employees and go out of business. Therefore, Ryan says, beneficiaries will see a reduction in services, lower quality items and disruptions of care due to a forced switch of providers.

In addition, Peter W. Thomas, Health Task Force Co-Chair, Consortium for Citizens with Disabilities testified that the organizations he represents believe the bidding program will disproportionately impact individuals with disabilities and chronic conditions. Thomas stressed that accessing the provider of choice is an important quality assurance mechanism, to be able to choose another provider if one does not meet their needs. Thomas predicts a decrease in the quality of assistive devices especially high-tech devices. Related services such as technology assessments and home evaluations will be minimizes, as will access to suppliers and access to brand name devices.

More information is available at: http://waysandmeans.house.gov/hearings.asp?formmode=detail&hearing=630&comm=1