INDIANAPOLIS--State officials have decided to halt a contract to Michigan-based J&B Medical Supply that would have made the company the sole supplier of incontinence supplies and other disposables for Indiana's Medicaid program.

The state had been considering the agreement as a pilot to "see how it worked and then make an ultimate decision," according to Indiana Family and Social Services Administration spokesman Dennis Rosebrough.

But after drawing fire from opponents--including the Association of Indiana Home Medical Equipment Services--the state changed its position. "As we floated that balloon, a number of people raised issues, and so we made a decision that rather than go down a troublesome road, we would not do that," Rosebrough told HomeCare Monday. Instead, he added, the state will issue a traditional request for proposal from both in- and out-of-state companies in the next few months.

Judy Bunn, executive director of AIHMES, which represents more than 80 companies in the state, had expressed concerns in a newspaper article published Tuesday that the state's original decision would be bad for both home care businesses and patients. "There are companies who will go out of business or have to lay off people," Bunn told the Fort Wayne News-Sentinal. "The patient will lose the choice of providers and choice of products."

The newspaper said that under such a contract, state residents covered by traditional Medicaid would not have been able to purchase incontinence, catheter or ostomy supplies from an Indiana home care business.

The state currently spends about $4 million on such supplies for people on Medicaid, and in an effort to save money, is committed to giving the contract to one provider, the News Sentinel reported. According to Rosebrough, the state did not have to request bids for the contract because it was for a one-year pilot program.

Bunn said AIHMES, which would like to bid on the contract itself, is willing to work with the state. "If they have a specific dollar amount they are going to save, let us know. We are certainly looking at that to help them realize the savings," she told the newspaper.

The American Association for Homecare said it alerted other state HME association leaders about the issue after receiving a heads-up from AIHMES Board Director George Kucka of Fairmeadows Home Health Care in Schererville, Ind.

"This very same issue may emerge in other states," AAHomecare said.