Herger supports bidding for Medicare supplies

By David Benda

Wednesday, October 6, 2010

Nobody’s afraid of competition.

But home medical equipment providers fear that a competitive bidding policy for Medicare being tested in certain U.S. markets will kill the competition — leaving patients with few choices, driving people out of business and costing the industry thousands of jobs.

That was the message New West Medical Inc. in Redding had for north state Congressman Wally Herger, who toured the Tanqueray Court facility Wednesday.

Afterward, New West Medical owners Tony Lewis and Steve Gavras lobbied the Republican to co-sponsor HR 3790, which would end competitive bidding.

Herger, a ranking member of the House Ways and Means Health Subcommittee, told the owners in the morning that his trip was a fact-finding mission. He wasn’t going to make a decision.

But on Wednesday afternoon, the congressman’s spokesman phoned to say Herger would not sponsor HR 3790.

“Complete repeal (of competitive bidding) is not the answer,” Matt Lavoie said. “We need to move forward with competitive bidding.”

Lavoie noted competitive bidding will save Medicare and consumers huge amounts of money.

Told of Herger’s decision, Gavras said he was surprised the congressman made up his mind so quickly.

“They are flashing it at the expense of patients and risk a much larger expense later,” Gavras said. “He (Herger) is doing what he probably has accused the Democrats of doing: pushing the expense down the road.”

Under competitive bidding, Gavras said, the winning company won’t have any incentive to do follow-up care on the patient, ultimately putting more people in the hospital and driving up costs in the long run.

“The winning bidder’s pricing doesn’t incentivize for the extended patient evaluation and follow-up, and the supplier may provide only minimal mandated services, as well as the lowest cost devices,” Gavras wrote in a letter he gave to Herger on Wednesday.

Sitting down with Gavras and Lewis after his tour, Herger shared their concerns about driving away competition.

“I’m all for competition, but if you have competition where you eliminate everybody except for one, you really don’t have competition,” Herger said.

The U.S. Government Accountability Office in a November 2009 report acknowledged that competitive bidding for durable medical equipment has hit some snags, including poor timing with the bidding process and lack of clarity in bid submission information. These are issues that the Center for Medicare & Medicaid Services is addressing.

CMS has projected that the reduction of Medicare payments for items acquired from the first round of competitive bidding would have averaged 26 percent when compared with payments under the Medicare fee schedule.

Congress in 2003 required CMS to start a competitive bidding program for home medical equipment, and the program started in March 2008.

Competitive bidding has yet to be tested in Shasta County.

Asked why Herger didn’t tell New West Medical in the morning he would not co-sponsor the bill to repeal competitive bidding, Lavoie said Herger wanted to be certain he had the facts.

“He certainly never rushes into a decision of such importance for our country,” Lavoie said.

Companies like New West Medical provide equipment like oxygen tanks, wheelchairs and beds.

Roughly two-thirds of New West’s business comes from government programs like Medicare. But budget cuts have dramatically reduced the reimbursement money it gets.

“Our industry has put on the table different methods to save money. … And we are open to that. But competitive bidding is so unfair to the small providers. We just cannot compete with the large purchase power,” Northern Rehab & Respiratory owner Stephanie Schwartz said Tuesday. Schwartz was not at Wednesday’s meeting with Herger.

Schwartz hoped that the congressman’s visit would give him a new perspective on what home medical equipment providers face.

“He hasn’t been a friendly vote for us,” Schwartz said.

Standing outside his office after Herger’s visit Wednesday, Gavras pondered a future with competitive bidding.

“I hope somebody will look at the increase in hospital costs over the next 20 years,” Gavras said.