Medical goods suppliers unhappy with Medicare's new round of price bidding

Suppliers of durable medical goods such as oxygen tanks and wheelchairs are unhappy with Medicare's plan to stage a second round of bidding to determine reimbursement prices in areas including Philadelphia, South Jersey, and northern Delaware.

"This is a slow-motion train wreck," said John Shirvinsky, executive director of the Pennsylvania Association of Medical Suppliers. "This is not a program that will play out well for Medicare, Medicare patients, providers, or the economy."

Under pressure to cut costs, and under laws passed by Congress and signed by the last two presidents, Medicare sought to thwart fraud and reduce costs by having medical-device suppliers submit bids for goods that patients use at home.

Besides wheelchairs, oxygen tanks, and corresponding supplies, the categories of goods include hospital-type beds, walkers, feeding tubes, and products used for certain kinds of chronic-wound care. There will also be a national bidding process for diabetic blood-testing supplies.

Medicare is paid for by taxpayers and generally serves the health-care needs of people 65 and older, but depending on a person's work history and situation, there are varying costs. Locally, patients won't need to do anything until implementation of care under the new process starts in 2012.

The first bidding round began Jan. 1 and included nine geographic areas, Pittsburgh among them; the second round covers 91 areas. Through the first six months in the first-round areas, the program produced $130 million in savings, Medicare deputy administrator Jon Blum said Friday, "without compromising the quality of care."

Blum said that the system would be carefully assessed but that this slice of Medicare had been problematic.

"I think it was clear that for too long this part of the program overpaid, led to overutilization, and led to concerns with fraud and abuse," he said.

Shirvinsky said he and the 180 companies the medical-suppliers association represented would be happy to see fraud stopped. However, he said, Medicare's chosen system of bidding will provide short-term relief for the government but long-term pain for all parties because it will encourage fraud. Then, he said, when home health care drops off, more patients will end up in hospitals at greater cost.