Lawmakers seek delay to Medicare bidding program

In response to an aggressive lobbying campaign and widespread concern in Congress, Reps. Pete Stark (D-Calif.) and Dave Camp (R-Mich.) introduced legislation Thursday to postpone the start date of an industry-opposed competitive bidding program for medical equipment under Medicare.

Although durable medical equipment (DME) industry interests won a postponement of the program, they are being made to pay for it through across-the-board cuts in Medicare fees for their products during the interim.

“This is no free lunch,” Stark said.

{mosads}The competitive bidding program, the first round of which is set to take effect on July 1, would be postponed for 18 months under the bill. The bill would offset the $3.1 billion, five-year cost of the delay by making a 9.5 percent, nationwide cut in 2009 to fees for the types of equipment subject to the bidding program, then a 2 percent increase in 2014.

“We’re introducing this bill to delay the DME competitive bidding program because the Bush administration designed this program with blinders on to the needs of beneficiaries and the small companies that make up most of the DME industry,” Stark said.

“The implementation of this necessary program has been flawed and needed to be fixed. This bill provides us with the time to get the program right and ensure we are reducing costs while protecting beneficiaries in the long run. Equally important, this bill requires that we move forward with competitive bidding as a way to reduce costs,” Camp said.

The industry complained that the Centers for Medicare and Medicaid Services (CMS) mishandling the first round of bidding and contracting, unfairly excluding qualified suppliers and unwisely including unqualified companies.

CMS has steadfastly defended the program and its performance, citing not only the average 26 percent in savings from the program but also the new quality standards put in place as part of the bidding process.

Lawmakers have been sympathetic to industry concerns and worried about the uncertainty the program could create for beneficiaries who would have to change suppliers.

Stark and Camp, respectively chairman and ranking member of the Health Subcommittee of the Ways and Means Committee, have heard months of complaints from manufacturers and suppliers of oxygen equipment, power wheelchairs and other durable medical equipment. The panel held a hearing on the issue in May, at which Democrats and Republicans were critical of the implementation of the program by CMS.

Minority Leader John Boehner (R-Ohio) and Energy and Commerce Committee Health Subcommittee Chairman Frank Pallone (D-N.J.) also sponsored the Stark-Camp bill.

Without congressional action, the DME marketplace will undergo a major change on July 1 in 10 metropolitan areas, when only those firms that won bids earlier this year will be permitted to sell 10 categories of durable medical equipment to Medicare beneficiaries. CMS also has plans to being expanding the program to 70 additional cities next month.

Also on Thursday, Senate Finance Committee Chairman Max Baucus (D-Mont.) reiterated his intention to add the Stark-Camp legislation to his Medicare bill pending in the upper chamber. “Their bill is thoughtful and balanced. And it responds to many of the concerns that we have all heard from the DME industry,” he said.