Fate of Competitive Bidding No Longer Tied to Prescription Drug Issue, Baucus Says

WASHINGTON--Although Senate Majority Leader Tom Daschle, D-S.D., this week expressed skepticism that lawmakers will be able to compromise on a Medicare prescription drug package, the fate of competitive bidding still is in question, according to a spokesman for Senate Finance Committee Chairman Max Baucus, D-Mont.

"It's not an either-or proposition," the spokesman said. "The larger point is that there are Medicare issues that do not necessarily have to be linked to a prescription drug benefit."

That means lawmakers could reach a decision on Medicare provider issues--including competitive bidding for durable medical equipment--before the end of September, said Tom Connaughton, president of the Alexandria, Va.-based American Association for Homecare. "Although there are many Senators who oppose competitive bidding, it still appears that others, such as Sen. Bob Graham [D-Fla.], are working very hard to include competitive bidding in any provider bill that may be developed this session," he explained.

As the leader of a coalition that opposes competitive bidding, AAHomecare will continue to "pull out every stop" to inform lawmakers about the system's pitfalls, the association said.

While leaving the door open to the political demise of competitive bidding, a new report from The Weeks Group, a Melbourne, Fla.-based small-business consultant, discuses what might happen to DME providers if competitive bidding were implemented. After compiling information from "hundreds of pages of testimony, opinions, statistics, legislation and policy statements," the report concluded that national competitive bidding for DME would:

--eliminate more than half of the DME providers from the Medicare program;

--cause unsuccessful bidders who rely on Medicare for more than 15 percent of sales to become unprofitable; and

--cause successful bidders to lose as much as 80 percent of their operating margin.

In light of these findings, The Weeks Group recommended that the DME industry lobby to remove operating costs imposed by government regulations and to "unbundle" pricing so that providers could charge for services.

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