WASHINGTON — At a congressional hearing yesterday, Rep. Heath Shuler, D-N.C., called for an end to national competitive bidding.

Shuler convened the hearing of the House Small Business Subcommittee on Rural Development, Entrepreneurship and Trade, which he chairs, to discuss the effects of the Medicare bidding program on small business. During the hearing, he noted, the majority of DMEPOS suppliers are small businesses but the "bidding program allowed many of the small suppliers to be outbid by larger, less knowledgeable firms."

CMS implemented Round One of the program July 1, but Congress delayed it two weeks later after an outcry from HME stakeholders. Passage of the Medicare Improvements for Patients and Providers Act July 15 ended the contracts that had been signed for the first round and made some changes to the program.

But in the waning days of the Bush administration on Jan. 16, CMS published an interim final rule to ramp the bidding program back up. The IFR was scheduled to become effective Feb. 17. On Feb. 6, however, CMS announced the agency was considering a 60-day delay under the Obama administration's instructions to review any regulations that had not yet taken effect. Comments on delay of the IFR are due today.

"In the next two months, the administration will review — and hopefully eliminate — the competitive bidding program altogether," Shuler said.

Several independent HME providers who bid in Round One testified at the standing-room-only hearing, which dovetailed with a Capitol Hill lobby effort sponsored by the American Association for Homecare.

Georgie Blackburn, vice president of Blackburn's in Tarentum, Pa., testified on behalf of AAHomecare that the bidding program is actually anti-competitive because it clears the marketplace of competition by reducing the number of eligible providers that can serve Medicare beneficiaries. "It will eliminate 90 percent of the home care providers — typically small, family-owned businesses — in any marketplace where it is implemented, "she said.

Blackburn also told the committee a program "whose primary selection criterion is product price represents a 'race to the bottom' that will jeopardize quality and access to care." She said her company, located in the Pittsburgh MSA, had a "learning curve" of several years on some aspects of home oxygen delivery. But companies "that had no experience providing patients with a product category or were not located in the MSA were offered winning contracts," she said.