ARLINGTON, Va. — As if DMEPOS competitive bidding weren't enough, now there is the possibility of a competitive bidding project for manufacturers of home medical equipment.
The American Association for Homecare said last week it had met with officials from the Government Accountability Office, which is studying the viability of such a program. The study was spurred by a request from lawmakers in the House of Representatives who want to determine if competitive bidding for HME manufacturers is feasible for both equipment and services.
"The meeting with GAO was extremely productive," said AAHomecare President Tyler Wilson. "We were able to explain the home medical equipment benefit and provide key insights into the program."
The association stressed that product costs are only a small portion of the total cost of furnishing home care products to Medicare beneficiaries and that the "process of moving home medical equipment from the manufacturer to the Medicare beneficiary's home is complex."
Said AAHomecare officials: "Both issues would create significant hurdles for an HME manufacturer bidding program and would create serious access-to-care problems."
Representatives from Elyria, Ohio-based Invacare were also part of the April 20 meeting and shared with GAO officials a copy of comments on the issue the company had sent in December to the House Ways and Means Subcommittee on Health.
In those comments, the HME manufacturing giant pointed out that there are a limited number of HME manufacturers, most of which exist on single-digit margins. In 2008, Invacare itselfrecorded a loss of $6.4 million.
"We believe there are minimal opportunities for savings from the DME manufacturing sector," wrote Cara Bachenheimer, the company's senior vice president, government relations.
Invacare also questioned how Medicare would "unbundle" payment for equipment acquisition cost and the services HME providers offer. Medicare has historically not recognized services separately.
"This would be a dramatic change for the DME industry, particularly given that Medicare has done a poor job of defining the specific services it expects Medicare beneficiaries to receive in conjunction with their DME items," Bachenheimer wrote. "How would the Medicare program determine how to compensate HME providers for all the services they provide for beneficiaries? "
Invacare also posed several other questions:
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"If the Medicare program were to limit the beneficiary's choice of product, how will beneficiaries have access to new technology that may be available, but that may not be included in the program's contract(s) with the contractor manufacturer(s)?
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How would the Medicare program ensure that contracted manufacturers' products would meet the full array of all beneficiaries' needs?
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"How would the Medicare program ensure that beneficiaries will have access to quality products and that price will not be the sole determinant? We believe it is essential that Medicare define specific performance standards for any products that would be covered under such a program."
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"What criteria would the department require of contractors?" On that concern, Invacare pointed out that the Department of Veterans Affairs currently holds contracts with manufacturers and "there are multiple complex and sophisticated requirements."
In addition, the company noted, there is a huge difference between the VA structure and the current manufacturer-to-provider-to-beneficiary HME delivery model. The VA, Invacare said, has a "built-in infrastructure that includes medical personnel and administrative support via their regional facilities."
Following Tuesday's meeting, GAO officials toured Roberts Home Medical in Germantown, Md.
"The site visit allowed GAO personnel to gain an in-depth look at how an HME facility works, the type of equipment that is prescribed to patients and a demonstration of the level of service that HME providers furnish to patients," AAHomecare reported. "We were also able to show the complex nature of rules and billing requirements that all HME providers must comply with in order to participate in the Medicare program."
Walt Gorski, vice president of government affairs for AAHomecare, attended the tour. "Nothing shows the value of home care like a facility tour," he said. "Without this type of exposure, reports and studies on our sector cannot capture the complete picture of the patients who need the HME items, the services provided, or the regulatory morass that HME providers must wade through."
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