HHS Report Identifies Weaknesses with Competitive Bidding Program, Says Coalition

10/2/2002

From: Julie Phillips, 703-535-1889, juliep@protectaccess.org, of the Coalition for Access to Medical Services, Equipment and Technology (CAMSET)

WASHINGTON, Oct. 2 -- A new Department of Health and Human Services (HHS) report evaluating Medicare's competitive bidding demonstration projects was submitted to Congress with little public fanfare.

The report addressed "important issues that bear continued monitoring."

Assessing the demonstrations in Polk County, Fla., and San Antonio, Texas, the "Second Annual Report to Congress" on the status of competitive bidding, submitted by the HHS Secretary Tommy Thompson on September 12, identifies some troubling findings with the program, which include:

-- New home oxygen beneficiaries in Polk County experienced a decline in access to portable oxygen which enables beneficiaries with disabilities to function outside of the home and in the community.

-- Beneficiaries who are new users of medical equipment in Polk County were more likely to have their equipment delivered by someone other than their provider.

-- Beneficiaries who are new users of medical equipment reported a reduction in maintenance visits in the past 30 days, and beneficiaries requiring surgical dressing reported on average a substantial reduction in the number of contacts with the supplier in the last six months.

The report also states that the evaluations remain incomplete, with a number of important research activities still to be conducted next year. Among these are beneficiary and supplier surveys in San Antonio, claims analysis, further bid analysis, and continued site surveys.

Recognizing that it is too soon to draw final conclusions from the demonstrations, the report states, "After all the data are in, we will make a final assessment and recommendations in the third report to Congress due next year."

Indeed, the detailed analysis submitted with the secretary's report concluded, "...with only two years of experience under the demonstration, it is premature to conclude what the long-term effects of competitive bidding on the evaluation issues will be."

"This report supports CAMSET's position, further acknowledging the fact that it is too soon to extend competitive bidding nationally. Before implementing this program, we must understand its effects on the welfare of beneficiaries who rely on this important Medicare benefit," said Tom Connaughton, chair of The Coalition for Access to Medical Services, Equipment and Technology (CAMSET), and president & CEO of AAHomecare,

"This report makes clear that there is still much we don't know," stated John Kemp, voluntary chair of the American Association of People with Disabilities (AAPD), a CAMSET member. "We have serious concerns with proceeding with a national competitive bidding program when important questions about access, quality, and choice of provider have not been fully answered."

The Center for Medicare & Medicaid Services' (CMS) analysis of the first round of the demonstration -- the only round that has been completed -- stated that "it is premature to declare that competitive bidding is either an appropriate or an inappropriate reimbursement mechanism" for durable medical equipment. Similarly, in its testimony before the Senate Appropriations Committee on June 12, 2002, the GAO stated, "The recent demonstrations that set payments for items through competitive bidding were instructive, but the positive results achieved may be neither applicable nor practical on a wider scale for many products."

The Coalition for Access to Medical Services, Equipment and Technology (CAMSET) is currently comprised of over 20 consumer advocacy organizations and trade associations, and growing, who are concerned that the expansion of competitive bidding from two ongoing demonstration projects to a national policy is premature and threatens to undermine quality of care, restrict patients' choice of suppliers and service providers, stifle the development of new technology, and drive suppliers out of operation.

Additional information about CAMSET is online at http://www.protectaccess.org/reports.htm.