ELYRIA, Ohio--In a letter sent last week to 28 members of the House of Representatives, Invacare Chairman and CEO Mal Mixon urged support for H.R. 1845, known as the Tanner-Hobson bill, to "protect beneficiary access and enable small providers to continue to serve Medicare beneficiaries."

Introduced in late March by Reps. John Tanner, D.-Tenn., and David Hobson, R-Ohio, the bill would soften some effects of competitive bidding by allowing any qualified provider who has submitted a bid below the current allowable to continue doing Medicare business (see HomeCare Monday, April 2.)

In the May 7 letter, Mixon stressed the plight of seniors--who will have limited beneficiary choice--and small providers, many of whom, he said, could go bankrupt under the bid program.

"CMS estimates that over 50% of small business will not win a bid. When that occurs, these small businesses, whose revenue is largely Medicare, will likely be forced into bankruptcy," Mixon wrote the congressmen. "As the industry's largest creditor, Invacare will have a major negative financial impact if a substantial number of our customers go bankrupt. The Tanner-Hobson bill would fix this by allowing any willing provider to participate in the program at the bid rate."

Industry advocates have launched a major push for cosponsors in hopes of getting the bill passed, and have asked providers to send similar letters to their representatives.

The text of Mixon's letter follows:

I am writing to ask you to sign on as a co-sponsor of H.R. 1845, a bill introduced March 29, 2007 by Representatives John Tanner (D-TN) and David Hobson (R-OH). The bill, "The Medicare Durable Medical Equipment Access Act," would rationalize the Centers for Medicare and Medicaid Services' (CMS) implementation of the competitive acquisition program for durable medical equipment and supplies, mandated by the Medicare Modernization Act of 2003. The bill would protect beneficiary access and enable small providers to continue to serve Medicare beneficiaries.

lnvacare Corporation is the global leader in the manufacture of the broadest product offering of innovative home medical equipment (HME) that promotes recovery and active lifestyles. The majority of this equipment falls under the definition of "durable medical equipment" as defined under Part B of the Medicare Program. Home medical equipment is an integral part of our nation's health care system and is proven to be clinically efficacious, cost effective, and consumer preferred. Headquartered in Elyria, Ohio, Invacare sells its products to approximately 15,000 independent home medical equipment providers throughout the United States.

On April 2, 2007, CMS issued the final regulation implementing the competitive acquisition program, and is now collecting bids from providers in the first ten large metropolitan areas. The program will go live April 1, 2008. CMS is providing less than a month for the industry to digest and understand the many complexities of the 401 page regulation before suppliers must undergo complex calculations and processes to submit bids that are due the end of June. This document is a true example of our government gone amuck. It is a complete takeover and control of an industry that is already highly competitive and which represents only slightly more than two percent of the Medicare budget. There are complexities related to how Medicare will select contract suppliers, complexities related to how CMS will calculate the bid amounts for each HCPCS code included in the ten product categories, and how this bid program will clash with the Deficit Reduction Act's mandate that seniors be forced to assume ownership and responsibility of their complex oxygen equipment and other HME items.

CMS's attempts to provide small suppliers with an ability to compete are wholly unrealistic in a competitive marketplace. It is likely that seniors with multiple needs will be required to obtain different items and services from different providers. This will result in significant confusion among a population that is already dealing with chronic and acute conditions (seniors will receive co-payment invoices from multiple providers and will have to know which provider to call to obtain service for which item, etc.).

We are very concerned about the ability of the majority of our customers who are small business to win a bid in these ten large metropolitan areas. In fact, CMS estimates that over 50% of small business will not win a bid. When that occurs, these small businesses, whose revenue is largely Medicare, will likely be forced into bankruptcy. (As the industry's largest creditor, Invacare will have a major negative financial impact if a substantial number of our customers go bankrupt.) The Tanner-Hobson bill would fix this by allowing any willing provider to participate in the program at the bid rate.

H.R. 1845 does not repeal competitive acquisition for durable medical equipment (DME). It seeks to make reasonable changes to the structure of the competitive acquisition in order ensure beneficiaries' access to DME is maintained, protect small business providers of DME, and foster a dynamic marketplace for Medicare reimbursed DME. The most innovative and cost effective health care marketplace is one in which a large number of suppliers/providers are competing for business. Approximately 80% of DME suppliers are small businesses that are ill equipped to participate in this federal contracting process. However, small providers are an important part of the DME marketplace, so this bill aims to make competitive acquisition work for small business, preserving consumer access.

If a significant portion of small suppliers are eliminated every three years because of the federal contracting process, competition in the marketplace will diminish, prices will eventually increase, quality will erode, and beneficiaries will be left with few choices. This program will come dangerously close to eliminating the competitive marketplace that ensures seniors have access to high quality items and services, [as] well as their choice of provider.

I urge you to sign on to H.R. 1845 as a co-sponsor.