July 1 was a significant date for many Minnesotans with disabilities who rely on medical supplies for daily living. That’s when new federal regulations on competitive bidding for Medicare program suppliers were to take effect for the Twin Cities region. The result thus far has been a lot of confusion for clients and suppliers. People are questioning where their supplies will come from and if costs will increase.
While some suppliers contend that needed medical goods can be provided with little disruption and at the same or lower costs, clients and other suppliers are worried about the quality of products, the possibility of long shipping delays and how equipment will be serviced if repairs or replacement parts are needed. For seniors and people with disabilities, it may mean severing long-term relationships with suppliers and finding new ones. For some suppliers, there are fears of lost business and ultimately economic survival.
“There’s really a lot of concern about vendors serving Minnesota, who are from other states,” said Anne Henry, attorney for the Minnesota Disability Law Center.
“If even one person is injured due to competitive bidding, it’s unacceptable,” said Mike Bailey, chief executive officer of St. Paul-based Handi Medical Supply.
Dozens of advocacy groups around the country are opposing competitive bidding, including the American Association of Homecare Providers, Christopher and Dana Reeve Foundation, the Brain Injury Society of America and the Muscular Dystrophy Association. People for Quality Care, an Iowa-based group, is tracking developments around the country, at www.peopleforqualitycare.org and on the group’s Facebook page.
In mid-June House Resolution 2375 was introduced in Congress. It would delay implementing round two of competitive bidding until a number of issues can be resolved. The Transparency and Accountability in Medicare Bidding Act was introduced by U.S. Rep. Glenn “G.T.” Thompson (R-Penn.) and Bruce Braley (D-Iowa). More than 200 members of Congress had signed on to support the measure as Access Press was going to press.
Competitive bidding is also the focus of a growing number of lawsuits around the country. This spring Key Medical Supply of Shoreview took its dispute over competitive bidding to the Eighth Circuit Court of Appeals.
Key Medical sued Kathleen Sebelius, Secretary of the United States Department of Health and Human Services, and Marilyn Tavenner, Acting Administrator of Centers for Medicare and Medicaid Services (CMS), but had the lawsuit dismissed earlier this year in U.S. District Court. The court made the ruling due to lack of subject manner jurisdiction. In his ruling. Judge Donovan Frank expressed concerns about the competitive bidding program. Frank stated that while he lacked authority to rule on the program’s legality, the federal government is ignoring the harm it could be inflicting on people with disabilities.
For its part, CMS has indicated that the first round of competitive bidding saved the Original Medicare program more than $200 million and resulted in better value for Medicare and beneficiaries, with lower prices and continued access to quality items from qualified suppliers. CMS also notes it is implementing a national mail order program for diabetic testing supplies.
“Qualified, accredited suppliers with winning bids are chosen as Medicare contract suppliers,” the CMS website stated. “Beneficiaries with Original Medicare who obtain program items in program areas will usually need to get these items from contract suppliers if they want Medicare to help pay for the item, unless their current suppliers become grandfathered suppliers (non-contract suppliers that choose to continue to provide certain rented equipment under the terms of the program).”
But advocacy groups contend that too many concerns aren’t being addressed and that calls aren’t being returned.
Another concern is, if a person lives in Spring Valley, Wisc., a rural town in the competitive bidding area and needs a scooter or basic group 2 power chair, the closest vender is 26 miles to Red Wing or 65 miles to Mounds View. Are vendors going to come to rural areas in a timely manner with no known reimbursement, if repairs are needed?
The new regulations are tied to the Medicare Modernization Act Law of 2003, which required the (CMS) to establish a competitive bidding program for durable medical equipment prosthetics, orthotics and supplies. This program went through development, had its first round in nine states starting in 2008 and began round two on July 1. Round two involves 100 Metropolitan Statistical areas in all 50 states.
In these areas, including the 13-county Twin Cities region, only contracted suppliers are allow to distribute competitively bid items. This includes all or part of Hennepin, Ramsey, Washington, Dakota, Scott, Carver, Wright, Sherburne, Isanti, Anoka and Chisago counties in Minnesota and St. Croix and Pierce counties in Wisconsin.
The change affects Medicare beneficiaries with original Medicare. Medicare Senior and Senior Advantage plans are not affected. Nor are other plans including UCARE for Seniors, Medica for Seniors, HealthPartners for Seniors and Secure Blue.
The products covered by competitive bidding are in nine categories: oxygen supplies and equipment, CPAP and BiPap therapy, walkers, diabetic equipment and supplies, hospital beds, Group Two support surfaces (low air loss), negative pressure wound therapy, enteral equipment and nutrition therapy, and Group Two power wheelchairs, scooters and manual wheelchairs. Bailey said these are some of the most-used items.
Medical supply companies have had different reactions to competitive bidding. Although Handi Medical did win a contact, the company opted not to sign it. Bailey said the price offered by CMS was 15 to 20 percent below their bid amount.
“We felt that at their [CMS] price points, we would have been forced to compromise the services we provide.” Concerns about having to cover such a large geographic area and the prospect of providing fewer product choices to customers were other red flags.
Vendors who successfully bid on these items and signed contracts with CMS took reductions of as much as 63 percent, said Bailey. “These are very significant reductions.”
Not only do the reductions raise concerns about quality of products themselves, there are also concerns about where suppliers for a specific area are located. Bailey noted that for all products, many designated suppliers aren’t in Minnesota. That raises concerns about the ability to have supplies shipped in a timely manner.
“We’ve been working on this for five years, we’ve been to Washington, DC and to the Boston area, many times” Bailey said.
Providers currently renting equipment to Medicare clients covered under competitive bidding may elect to grandfather in some customers and continue providing service. Two of the designated products, diabetic test supplies and enteral nutrition, don’t allow for grandfathering. Medical supply companies have spent the last several months informing clients about the new regulations. Anyone with questions about affected supplies and whether their supplies are affected should contact their supplier.
Anyone with questions about competitive bidding can call 1-800-MEDICARE (1-800-633-4227), visit www.medicare.gov or call their State Health Insurance and Assistance Program (SHIP) for more information. Another useful website is the CMS toolkit, at http://tinyurl.com/CMS-toolkit