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Home Health & Hospice Week

Competitive Bidding:

BIDDING PROGRAM'S FUTURE COULD HINGE ON CONGRESS' ACTION

Published on Mon Oct 08, 2007

Could subcommittee hearing kick start a campaign for change?

If you are a small supplier of home medical equipment, Medicare's new competitive bidding program may seem like a vengeful Transformer bent on destruction--but don't give up hope for a rescue.

On Oct. 31, members of the U.S. House Small Business Committee's Subcommittee on Investigations and Oversight heard testimony on the program's impact on small HME players.

New total: CMS is reviewing about 6,300 certified bids from round one of Medicare's new competitive bidding program for HME, testified agency official Laurence Wilson.

That number falls significantly short of an early CMS projection that nearly 16,000 would "submit a bid because they will want the opportunity to continue to provide these products to Medicare beneficiaries and to expand their business base." But Wilson tried to downplay the difference between the actual and projected bid numbers, saying that the numbers are "much closer together than folks had been thinking."

Still, industry insiders say the low number of total bids adds to concerns that many small suppliers will falter under the strain of competitive bidding. Georgetta Blackburn, an HME provider in Pittsburgh who testified on behalf of the American Association for Homecare, said that the low number of bids reflects an attitude that suppliers "chose not to get involved."

"Since Medicare typically makes up between 35 to 50 percent of a small home care provider's practice, losing the ability to provide competitively bid items for the three-year contract is essentially a death knell to these providers," she said.

"While the objective is to reduce costs, it is not clear that the new competitive bidding program will achieve this goal without unraveling the DME small business community," said subcommittee chair Jason Altmire (D-PA). "This may spell ruin for small providers whose revenues are often less than a million dollars a year."

Altmire expects that the only businesses to survive the program will be national suppliers, he added.

Next step: Altmire and others could push for a House Ways and Means Committee hearing on competitive bidding's impact.

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