Providers, Patients Frustrated by CMS Competitive Bidding Program

From: The Heartland Institute

The Centers for Medicare & Medicaid Services claim their new competitive bidding program has not resulted in any changes in beneficiary health outcomes. But CMS’s observations differ significantly from those of patients and providers of home health care.

On January 1, 2011, CMS launched the first phase of its competitive bidding program in nine different areas of the United States: Charlotte, Cincinnati, Cleveland, Dallas-Fort Worth, Kansas City, Miami, Orlando, Pittsburgh, and Riverside, California. Later this year the program will begin in another 91 regions, with the aim of cutting Medicare costs through an auction approval process for home medical equipment and services.

Suppliers Push Back

Jim Kokenge is president and CEO of PAX Medical Supply in Cincinnati, which provides medical equipment for home health care rehabilitation. He says the new program has sparked confusion and problems.

“We had a patient whose wheelchair we could not service because we did not win the bid. She was a former nurse and called Medicare to ask why we couldn’t service her wheelchair. They called me back with her on the line and wanted to know why I wouldn’t service her wheelchair. I told her I wasn’t allowed to under Medicare’s new competitive bidding law,” Kokenge says.

“The Medicare staffer said this was the first time she’d heard such a thing, so I read to her from Medicare’s own Web site,” he added. “She was unfamiliar with that as well. She told me to go ahead and service the woman’s wheelchair, and I told her I would not because Medicare would not pay us.”

Kokenge says this is not a unique experience.

“This sort of thing went on for several weeks, until I got a different woman on the phone from Medicare. She said, ‘I’m tired of dealing with all these calls; this is all I’m getting.’ I got a supervisor on the phone and told him about the call with the flustered Medicare clerk, but he was more interested in addressing the conversation I had with the clerk rather than helping the woman in the wheelchair,” says Kokenge.

Program Prevents Assistance

Kokenge is frustrated by the new program’s odd rules, which prevent him from servicing patients he’s supplied for years.

“Our company concentrates on rehab mobility—wheelchairs and walkers. About half the time we sell walkers with the wheelchairs to patients so they can transition to walking again. Now, because we can’t sell walkers, we’re not getting the calls we used to get to sell wheelchairs,” Kokenge explains. “And we can’t even go over to this bedridden woman’s house and change the battery in her wheelchair. According to Medicare’s Web site, her wheelchair has to fall down the stairs for us to be allowed to fix it.”

Kokenge says the confusion has troubled physical therapists as well.

“Therapists would call to order up a walker or wheelchair, and I wasn’t allowed to sell it to them. They were forced to use vendors they didn’t know, who dropped it off without even explaining how to use it,” says Kokenge.

CMS Disconnect from Complaints

According to Sean Schwinghammer, executive director of Florida Alliance of Home Care Service, CMS is insulated from the complaints of patients and device makers.

“Since competitive bidding was implemented, lots of organizations are complaining about it. We’ve done surveys and found their observations disagree completely with what the CMS is saying about competitive bidding,” Schwinghammer said. “Patients can’t get wheelchairs serviced, can’t buy medical supplies, and are spending extra days in hospitals because they can’t get walkers or oxygen.”

“We’ve seen firsthand the negative effects of this law. There’s a disconnect from what CMS is reporting and what’s actually occurring on the ground,” Schwinghammer said.

Auction Process Criticized

Michael Reinemer, vice president of the American Association for Homecare, has been tracking complaints since December of last year. He says his organization has fielded more than 500 complaints from patients and users, ranging from confusing information from Medicare to an inability to purchase the medical supplies necessary for their home care. 

“The program is not very well designed. Nearly 250 economists have weighed in on the design of the rule and determined that from the standpoint of an auction system, Medicare’s competitive bidding rule is poorly designed,” says Reinemer.

“It’s ironic that it’s called a ‘competitive bidding’ program, since it’s very anti-competitive. Lowball bidding ensures that there are problems with quality and access to care. People want to check out of the hospitals, but they can’t because they can’t find a vendor in their area that can sell them the products or medical supplies and services they need to stay at home safely, which leads to extended hospital stays that drive up costs for medical care,” explains Reinemer.

Consumers ‘In for a Rude Awakening’

Despite what the CMS says, the new competitive bidding law has dramatically affected providers, patients, and therapists, he says.

“Obviously we’ve got some very different impressions and feedback about competitive bidding than CMS,” says Reinemer.

Kokenge expects the negative reactions to grow when the program expands later this year.

“CMS didn’t ask how this would affect us, and now we’re finding out,” says Kokenge. “Currently the program only affects nine metropolitan areas. In 2012, 91 more areas go online with competitive bidding. People are in for a rude awakening.”