A Medicare competitive bidding program for durable medical equipment (DME) providers scheduled to begin July 1 is being met with strong resistance from legislators, nursing home advocates, DME suppliers and Medicare beneficiaries alike.
Proponents of the program say it will save Medicare roughly $1 billion per year once it goes national by reducing over-payments on medical equipment. Under the new system, accredited DME suppliers will submit bids to Medicare in hopes of being allowed to sell to beneficiaries. The program will begin its first phase in the 10 largest metropolitan statistical areas and affect the 10 largest DME suppliers before moving on to the second phase in 2009.
But lawmakers aren’t convinced of the program’s merits and are seeking an 18-month moratorium against its implementation. They argue that smaller DME companies will be unable to compete against industry giants and will likely lose money or go out of business. Also, larger suppliers that have won bids do not have experience in delivering a product included in the contract, they have learned. That could affect vulnerable populations, such as nursing home residents. Sens. Max Baucus (D-MT) and Charles Grassley (R-IA) have included measures to temporarily block the bidding program as part of their respective bills to stop the Medicare physician payment cut.
