Oxygen tanks, electric scooters, sleep apnea machines and other devices often prescribed for the elderly will become less expensive in Atlanta as of today under a new Medicare program. But opponents claim the plan will prove burdensome for seniors and devastating for small businesses.
Medicare is rolling out competitive bidding for these kinds of prescribed devices in large cities nationwide, in spite of a move by Roswell Republican Tom Price and others in Congress to delay it. Medicare says the program will save consumers and the government nearly $43 billion over 10 years by limiting the number of vendors in a particular region and having them bid down the price. But Price says that plan will backfire on patients.
“The government is coming in and saying ‘We don’t like the company that you’re using, we want you to use this company because of the price only,’” said Price, a surgeon for nearly two decades. “So what we said is, ‘That’s crazy, doesn’t make any sense, the government can’t be responsive or care about patients. It’s impossible.’”
The government believes otherwise.
“Competitive bidding is working, is saving taxpayers and beneficiaries billions of dollars, and ends unnecessarily high payments for common purchases like wheelchairs, diabetic testing strips and oxygen equipment,” said Tami Holzman, a spokeswoman for the Centers for Medicare & Medicaid Services. “We remain confident that seniors will have access to their equipment, savings will continue, and we have no plans for delay.”
Owners of businesses that sell medical equipment are the most vocal opponents of Medicare’s change.
“It’s like a train wreck — you see it coming,” said Todd Tyson, president of Norcross-based Hi-Tech Healthcare. “I truly think it’s going to harm patients and it’s going to harm companies.”
In the past, doctors wrote prescriptions for canes, walkers, oxygen machines and other equipment. Patients could buy the items from the Medicare-approved supplier of their choice, with Medicare paying 80 percent and the consumer covering the rest.
Now suppliers have to submit bids to provide the equipment and supplies at lower prices than Medicare currently pays. The government tested the program in nine markets last year and is rolling it out to 91 more, including Atlanta, on today. Medicare selects suppliers based on these bids, and the elderly and disabled people covered by Medicare will have to use these suppliers in the future.
Federal audits and reports for years have found that Medicare paid higher than market rates to the companies that sell the doctor-prescribed items.
Allegations of fraud have also dogged the program, as companies hawked the equipment on daytime television with promises of Medicare coverage.
CMS said Medicare recipients who experienced the change in the cities covered by the pilot program did not have trouble with access or declines in health as a result of the change.
Price has proposed an alternative program, called the “Market Pricing Program” in which companies in a region could bid down a price, but then allows any company to sell equipment at that price instead of restricting sales to the winning bidders.
Price’s bill also would mandate that companies already have experience in the bidding area; a primary complaint from the device companies is that out-of-state competitors will deliver inferior service. Price said the new system would save the government the same amount of money, but his bill has not been officially analyzed by the nonpartisan Congressional Budget Office for its fiscal impact.
Tyson, of Hi-Tech Healthcare, supports the Price bill. He said his company bid on contracts for nine of the 10 available categories in the Atlanta market. It won just two of those categories.
“That means I cannot do a hospital bed, I cannot do a walker, I cannot do a wheelchair, I cannot do the (feeding tubes), I can’t do therapeutic support services anymore – all of the things we were doing,” he said.
Tyson said his company won bids to provide oxygen and negative-pressure wound therapy. But he said that winning those categories won’t make up for the products he’ll no longer be able to sell.
“It’s going to hurt,” he said. “July 1 my business will lose almost $140,000 a month in revenue. It’s big.”
Making arrangements for patients leaving the hospital could become more complicated under the system, said Barbara Ballard, vice president of post-acute services for the WellStar Health System, which operates hospitals in Cobb, Douglas and Paulding counties.
“Many patients need multiple categories of products and may well end up with multiple vendors, multiple deliveries, and multiple copays,” Ballard said in a statement. “Not only can this situation complicate the discharge process by having to make arrangements with more than one provider, but the actual discharge may be held up while multiple vendors make arrangements for delivery to the home.”
AARP, a advocacy organization for elderly Americans, supports Medicare’s new approach.
In the test markets the program reduced costs for beneficiaries and the Medicare program and did not lead to significant complaints or access issues, said Andrew Scholnick, a senior legislative representative at AARP.
“The doom and gloom scenario hasn’t played out,” Scholnick said.
How Medicare changes effect you and businesses?
Q. What areas are included?
A. Most large metropolitan areas of the country are included. In Georgia, the latest phase of the roll-out will cover metro Atlanta, metro Augusta and the portions of Georgia included in the metro Chattanooga area.
Q. Are all Medicare plans included?
A. The new competitive bidding program applies only to Original Medicare. If you are on a Medicare Advantage Plan, your plan will let you know whether your supplier is changing.
Q. If I already have a supplier, do I have to change?
A. If you are already renting certain equipment on a monthly basis when the new program starts, you may be able to stay with that supplier for a limited time.
Q. What kinds of items are included?
A. Oxygen, oxygen equipment and supplies, mail-order diabetic supplies, wheelchairs, scooters, continuous positive airway pressure (CPAP) devices, respiratory assist devices (RADs), hospital beds, walkers, negative pressure wound therapy pumps, tube feeding equipment and a host of supplies related to medical equipment.
» Find more information on Medicare’s website.