A new program by the Centers for Medicare & Medicaid Services set to roll out in the Wichita area could have a dramatic effect on local providers of hospital beds, wheelchairs and other medical equipment to homebound patients.
CMS' DME competitive bidding program is set to take effect later this year in the Wichita area and 69 other metropolitan statistical areas across the country.
CMS says the program — rolled out at the beginning of the year in nine large metros, such as Kansas City, Miami and Dallas-Fort Worth — is intended to lower the out-of-pocket costs for Medicare beneficiaries and save taxpayers money on certain types of durable medical equipment.
It will do so by contracting with a smaller number of durable medical equipment companies selected in the competitive bid process.
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It is part of the Medicare Modernization Act of 2003 but its implementation has been delayed.
Local owners and managers of durable medical equipment companies said the competitive bidding program will mean less choice for Medicare patients and far less revenue for DME companies. Many of the state, regional and national associations say the program will mean the loss of hundreds of jobs.
"We are not looking forward to competitive bidding," said Joy Scott, executive director of Via Christi Home Medical.
For now, the competitive bidding applies only to power wheelchairs and scooters, oxygen equipment, walkers, hospital beds, and enteral nutrients, equipment and supplies.
Most providers said they will submit bids when the bidding process begins. The most recent information from CMS says that should happen this summer.
But even the companies that make a winning bid aren't assured that they will get reimbursed in full for the cost of the product.
Brian Lindsey, who owns Broadway Home Medical at 356 N. Washington with his father, said companies that won successful bids in the first round of bidding saw average cuts of between 32 and 33 percent in Medicare reimbursements from before competitive bidding.
"Providers are locked into that contract for three years," Lindsey said. "If those prices go up, and they will,... you have to accept what they (CMS) are willing to pay."
One company owner says it will put him out of business if he doesn't turn in a successful bid.
"That could just kill us," said Steve Palacioz, owner of Advanced Medical Concepts, an 18-year-old company.
Palacioz said new rules issued by CMS in January about reimbursement for power and manual wheelchairs was already affecting his business.
But that's nothing compared to the possibility of not being able to sell equipment to Medicare patients if his company is not selected in the bid process.
"I hope to pass (my business) on to my son, but the American dream is certainly deteriorating rapidly here," Palacioz said.
Cutting out multiple DME providers will mean fewer providers for patients to select from, Palacioz and others said.
"Essentially this is taking away patient choice," said Via Christi's Scott. "This also will allow anyone in the nation to submit a bid in this market. Independent companies that aren't connected to national companies could be affected tremendously."
Lindsey, of Broadway Home Medical, said that for the past couple of years his company has deliberately been trying to diversify the products it sells so it doesn't have to be as dependent on Medicare revenue.
Lindsey said competitive bidding comes a year after his nine-employee company took a 9.5 percent across-the-board cut in Medicare reimbursements. That's not to mention the shrinking reimbursement it receives from the state-run Medicaid program.
"Pretty much the last few years have been hit after hit after hit," Lindsey said.
There is some hope for providers. On Monday, two Pennsylvania congressmen introduced HR 1041, the Fairness in Medicare Bidding Act, which would repeal the competitive bidding program.
Earlier this month, Sen. Pat Roberts, R.-Kan., sent a letter to President Obama in response to his call for all federal agencies to review regulations that place an "undue burden" to businesses. Roberts named competitive bidding one of those regulations.
"We still have hopes," Scott said.