Devices & Diagnostics, Policy

DME suppliers support legislative delay to Medicare competitive bidding

Supporters of the Patient Access to Durable Medical Equipment Act of 2016 said the proposed legislation would ensure access to vital healthcare technology, particularly in smaller, isolated markets. It also would protect their profits.

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Nine national and 24 state healthcare trade and lobbying associations representing durable medical equipment (DME) suppliers sent a group letter to Congress this week to support a bill that would delay implementation of federally mandated competitive bidding processes and expected Medicare reimbursement cuts to their members serving rural and low-population areas.

Supporters of the bill, the Patient Access to Durable Medical Equipment Act of 2016 (S. 2736 and H.R. 5210), said the proposed legislation would ensure access to vital healthcare technology, particularly in smaller, isolated markets. It also would protect their profits.

Today, DME providers serving the 100 largest metropolitan statistical market areas — about 58 percent of the Medicare population — must participate in the Centers for Medicare and Medicaid Services‘ competitive bidding process.

The signers are associations representing home care, oxygen, home infusion and long-term care providers who contend that in larger metropolitan areas, their members can offset the reimbursement cuts brought on by competitive bidding with larger volumes of business and greater market share.

However, they noted that suppliers serving smaller markets of patients barely break even now. They fear that introducing the competitive bidding in rural markets would financially harm DME providers and force them to exit the market, leaving vulnerable patients without needed equipment and services.

“The legislation provides temporary relief from proposed Medicare reimbursement cuts affecting enteral [tube] nutrition therapy suppliers who face unique challenges and increases expenses associated with serving patients in less-densely populated areas,” said Linda Rouse O’Neill, vice president of government affairs for the Health Industry Distributors Association (HIDA), a trade and lobbying group that represents more than 100 distributors of healthcare products and supplies.

“HIDA supports H.R. 5210 because it’s about ensuring that Medicare beneficiaries have the critical healthcare products they need,” said HIDA President and CEO Matthew Rowan.

“It delays reimbursement cuts scheduled for July 1, 2016, until Oct. 1, 2017, allowing more time to determine the effects of current rate reductions on beneficiary access. This is particularly critical for patients requiring advanced clinical services such as enteral feeding. It is vital to ensure that patients like these have access to the products and services they need, even if they live in hard-to-reach rural areas,” Rowan continued.

The letter asserted that there has been little independent analysis of the competitive bidding program to evaluate its effects and determine whether it has restricted product access, harmed patients or compromised physician decision-making. In spite of this, the associations claimed that CMS has implemented an aggressive timeline to phase in prices established in competitively bid areas to those areas that have not experienced the competitive bidding process, mostly rural regions.

“The first phase of implementing these new payment rates took effect Jan. 1, 2016, with final phase-in by July 1, 2016,” the associations noted. “Six months is not enough time to monitor disruption in Medicare beneficiaries’ access to the DME items they need and to evaluate what impact major reductions in payment have on their access to life-sustaining equipment and services.”

The bill, which has 72 co-sponsors, has not yet gone through the committee process.

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