Competitive is a program designed by CMS (Medicare) to cut the price that they pay home medical equipment companies (like PHC) for the products and services we provide. There are a number of products that Medicare wants to do this with, including oxygen equipment, CPAP machines, and wheelchairs. Medicare's theory is that if equipment providers have to bid, then Medicare will know how cheaply providers actually believe they can provide the equipment for.

If all we did was drop off or ship equipment out, this would not be such a bad theory. What Medicare does not take into account is all the time and care that we put into taking care of our patients after the equipment is set-up. The post-set-up care will be greatly affected if competitive bidding is implemented.There is also a chance that PHC will not win a contract when we bid. Should this happen, we would not be able to continue to provide you with your equipment.

Please continue reading below to see how else Medicare's competitve bidding program will affect you.

Restricted Access and Choice:
To implement the competitive bidding demonstrations, Congress waived a patients right to choose a health care provider or supplier within the Medicare program. Your ability to choose a provider or supplier secures quality and continuity of care because it allows Medicare patients to establish long-standing relationships with providers and suppliers.

Loss of Quality and Service:
In contrast, non-demonstration beneficiaries have access to medically necessary professional services such as respiratory therapists and 24-hour on-call services. Competitive bidding eliminates market pressure to provide this clinical support for critically ill patients. The result is that Medicare beneficiaries in the demonstration areas may receive a lower standard of care.

"Competitive Bidding" is a Misnomer:
Although the term "competitive bidding" may sound attractive, the demonstration actually eliminates the free market competition that encourages the provision of high quality medical services to Medicare beneficiaries. Competitive bidding greatly reduces the number of HME providers who can serve patients with specific needs and diminishes the key component of free market competition - consumer choice. Medicare's winning bidders, therefore, are not subject to the market forces of consumerism.

A New Bureaucracy:
A program of national competitive bidding for HME would require a new bureaucracy to administer it. To properly administer a national program, CMS must fix structural flaws in the model and incorporate procedural protections and oversight capabilities. The ultimate expense of expanding the limited demonstration model to larger urban areas will eclipse any projected savings.

Impact on Small Businesses:
The average HME supplier is a small entrepreneurial operation with fewer than 20 employees and less than $3 million in annual revenue. For the average HME provider, the demonstration projects have amounted to a loss of approximately 27 percent of annual revenue. At least one provider in Polk County has filed for Chapter 11 protection, and many more have been forced to move out of the demonstration area.

Industry associations and several consumer advocacy organizations, have united to oppose competitive bidding by creating the Coalition for Access to Medical Services, Equipment and Technology (CAMSET). Together, the members of CAMSET are voicing their concerns that the expansion of competitive bidding from two ongoing demonstration projects to a national policy. The coalition will be augmenting its grassroots efforts on this issue in order to provide information to key federal legislators. Businesses in, and consumers of, the HME community are encouraged to do everything possible to teach policymakers at all levels.