Home Health & Hospice Week

HHS gets second letter in a week on evidence against program.

Federal officials may suddenly find it harder to ignore a study that condemns Medicare's competitive bidding program for home medical equipment as "faulty" and flawed.

Big news: Several weeks ago, Eli's Home Care Week broke the news to the industry of the important but obscure study, which was published in the January 2008 issue of the Southern Economic Journal (see Eli's HCW, Vol. XVII, No. 8). After reading the full SEJ article last week, representatives of the American Association for Homecare sent a Feb. 29 letter to HHS Secretary Michael Leavitt, calling on the Centers for Medicare & Medicaid Services to "delay the implementation of round one of competitive bidding until the study can be closely examined."

"We will also present the evidence of this important new study to members of Congress at our Legislative Conference," AAHomecare's Walt Gorski told Eli just days before the March 4 start of the conference.

The study calls the CMS' competitive bidding process for DME an "inefficient" process that's likely to lead to price increases and drops in quality.

After news of the study broke, AAHomecare scheduled the study's authors, Kerry Anne McGeary, associate professor of economics at Drexel University in Philadelphia, and Brett Katzman, associate professor of economics at Kennesaw State University in Kennesaw, GA, to speak at the legislative conference.

That platform may be just what the researchers--and suppliers--need.

"We communicated our findings to CMS prior to publication," McGeary tells Eli. "We received little response but got the impression that they didn't look favorably on our analysis."

With the HME industry now spotlighting the study, the agency may have more reason to respond to the findings. "CMS needs to know what respected economists are saying about this program in peer-reviewed research," says Gorski.

More fuel: A Feb. 22 letter from AAHomecare to HHS' Leavitt called on CMS to review a report critical of competitive bidding released by researchers at Robert Morris University in Moon Township, PA (see Eli's HCW, Vol. XVII, No. 9). That study was commissioned by the Pennsylvania Association of Medical Equipment Suppliers.

Background: Implementation of round one of competitive bidding for durable medical equipment, which affects suppliers in 10 metropolitan areas, is set for July 1, although CMS has yet to announce contract awards. Preparations for round two, which expands the program to 70 additional areas, are also under way.