* Greater costs to Medicare due to longer hospital stays - Confusion about the restricted list of contracted home medical providers delayed hospital discharges and triggered unnecessary emergency room visits.

* Non-local providers - Providers with no history of servicing a geographic area or no operations in a bidding area were awarded contracts.


* Inexperienced/unlicensed providers - Companies were awarded Medicare contracts to provide equipment and services for which they were not licensed in their states and for which they had no previous experience providing.

* Desperation bidding - Structural flaws in the bidding program caused providers to submit artificially low bids because they were faced with the threat of losing their businesses if not awarded a contract. Winning contracts also were viewed as commodities that could be sold once a bid was won.

Due to these problems, Congress delayed the bid program when it enacted the Medicare Improvements for Patients and Providers Act of 2008, in hopes that the federal Centers for Medicare and Medicaid Services would substantially improve and reform the program. However, the fundamental problems still remain in the bid program. The congressional action last year to delay the bidding program also required that the home medical equipment sector accept a 9.5 percent reimbursement cut effective January 1, 2009 to pay for the savings the bid program would have reaped.

"Competitive bidding will produce a bureaucratic, anti-competitive system that will have the unintended consequences of reducing quality and access to care for patients," said Wilson. "The result would be similar to a closed-model HMO and will have the effect of government-mandated consolidation in homecare. There are far better ways to save money than destroying the home medical sector."

Home medical equipment and care is already the most cost-effective, slowest-growing portion of Medicare spending, increasing only 0.75 percent per year according to the most recent National Health Expenditures data. That compares to more than 6 percent annual growth for Medicare spending overall. Home medical equipment represents only 1.6 percent of the Medicare budget.

Visit www.aahomecare.org/competitivebidding for details about the bid program.

The American Association for Homecare represents durable medical equipment providers and manufacturers serving the medical needs of millions of Americans who require medical oxygen, wheelchairs, medical supplies, inhalation drug therapy, home infusion, diabetic supplies, and other medical equipment and services in their homes. Association members operate more than 3,000 homecare locations in all 50 states. Visit www.aahomecare.org.

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