Friday, June 13, 2008

Flawed Medicare Policy to Have Dire Consequences for Beneficiaries and Suppliers, According to AmMed Direct

BUSINESS WIRE --Medicares proposed changes to its supplier policy, scheduled to take effect July 1, will have dire consequences for almost four million Medicare beneficiaries and for the companies that serve them, according to medical equipment supplier AmMed Direct.

AmMed Direct Chief Operating Officer Tom Milam recently met with senators and representatives in Washington, D.C., to ask them to address concerns about the impact of Medicares new competitive bidding program for Durable Medical Equipment. The competitive bidding program, set to launch in 10 pilot markets nationwide next month, will drastically reduce the number of Medicare suppliers and the fee schedule reimbursement amounts in an effort to cut program costs. The program will regulate reimbursements for many categories of medical equipment, including diabetic testing supplies, oxygen, wheelchairs and walkers. Medicare has plans to expand the program to another 70 markets in 33 states nationwide in 2009.

The competitive bidding program will mean less choice and lower quality products and services for Medicare beneficiaries, said Milam. We believe, in the long run, it will cost our Medicare program more. And we also believe it could threaten the health and well-being of many elderly people who depend on quality equipment and service to manage their illnesses. We urge Congress to stop or significantly delay this competitive bidding program immediately and reassess its goals and the policies needed to reach those goals.

Representatives John Tanner, D-Tenn., David Hobson, R-Ohio, and Jason Altmire, D-Pa., have released a letter signed by 132 House members asking for a one-year delay of the bidding program. Senators Sherrod Brown, D-Ohio, and George Voinovich, R-Ohio, are asking their colleagues to sign a similar letter. The American Association for Homecare announced yesterday that it has filed a lawsuit against the Bush Administration seeking a permanent injunction to prevent the program launch as well.

It is the opinion of AmMed Direct and many other suppliers, third-party observers and elected officials that the program is misguided and flawed. AmMed Direct is convinced that the program, as it is currently designed, will not save money and will likely cost the Medicare program exponentially more in related consequences for its beneficiaries.

Milam traveled to Washington along with Lorraine Farrar, director of AmMeds Better Care Program®, to voice their concerns and discuss potential solutions, including postponement of the program to resolve its potential problems or discontinuation of the program. AmMed Direct also communicated its concerns about the competitive bidding program to the House Ways and Means Health Subcommittee, which held a hearing on the program in May, and its chairman, Rep. Pete Stark, D-Calif.

Following is a summary of AmMed Directs concerns about the program. Further background information regarding the program and AmMed Directs position is also available. The following two paragraphs are attributable to AmMed Direct COO Tom Milam:

The competitive bidding process has been fraught with delays, confusion and errors. Now, with implementation just days away, Medicare beneficiaries themselves will soon be at risk. In addition, numerous medical equipment companies in the affected communities will likely go out of business, and this will happen in many more markets next year. The program will also limit the overall quality of products available to beneficiaries. For beneficiaries with diabetes, it will likely increase costs for Medicare in the form of higher-cost complications, such as hospitalization, as a result of the programs complicated and restrictive changes.

The process has also been fraught with procedural and operational problems. Almost 70 percent of the 1,000-plus companies that submitted bids were inappropriately disqualified or denied participation by the contractor hired by CMS, including AmMed Direct. Just imagine communities losing 70 percent of our medical equipment providers. The announced winning bids are also substantially below the bids prepared by most suppliers and even below cost for some items. There is a high likelihood that many of the winning bidders are unsophisticated operations that have no ability to deliver the volume or quality required or a few unscrupulous bidders with ulterior motives. In either case, bidders simply did what they had to do in order to win the bid without consideration of their ability to provide products and services successfully over the long term.

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