PAMS Joins Forces with Liberty Resources to Oppose Competitive Bidding in Philadelphia

Obtaining home medical equipment such as wheelchairs, walkers and life-saving oxygen systems has gotten a lot more difficult for Medicare beneficiaries living in southeastern Pennsylvania.

Under Medicare’s national bidding program for durable medical equipment (DME), which went into effect on July 1, a Philadelphia resident requiring a wheelchair is no longer able to obtain that equipment from most local providers such as Liberty Wheels located at 714 Market Street in the city of Philadelphia. Instead, there are only seven wheelchair providers located within 50 miles of Philadelphia – pre-bidding there were 185 – and only one located within Philadelphia city limits.
“This is a terrible situation for seniors and the disabled,” said Alan Holdsworth, disability rights activist and wheelchair user. “Buying and repairing durable medical equipment like wheelchairs is a local activity. People, especially people with physical disabilities and the elderly, look to local providers to take care of their equipment needs.”

Liberty Resources Chief Executive Officer, Tom Earle, stated that the ability to live and work independently in the community for disabled people using wheelchairs and other durable medical goods is directly related to having equipment in good, working condition and the ability to replace equipment locally and quickly is important to them. “A working wheelchair provides the user the mobility they need to participate in all aspects of daily activities. It is not feasible for them to have to travel great distances or wait days or weeks for repair or replacement.”

Under the new Medicare bidding regimen, the average distance to a wheelchair provider for Philadelphia residents is 505 miles. “This system makes no sense for the Philadelphia area,” said Holdsworth. “Medicare has awarded one contract to a wheelchair provider located within Philadelphia city limits and six contracts to firms in Florida and Texas.”

Liberty Resources Chief Administrative Officer, with oversight of Liberty Wheels, Fady Sahhar, noted that putting a user into a wheelchair is a process that normally requires the user to visit the provider’s facility to look at options available to them, ensure proper fitting and education on the proper use of the equipment.

Sahhar stated that “Liberty Resources has been forced to discontinue retail operations at its Liberty Wheels mobility equipment dealership due to the restrictions associated with the Medicare bidding program and other costs imposed by Medicare and Medicaid regulations. If a nonprofit like Liberty Resources is unable to sustain operations under this program, it is hard to imagine how anyone else will.”

Other affected equipment, such as continuous positive airway pressure (CPAP) machines require monitoring and tweaking to ensure proper fit and usage. The Medicare bidding program impacts eight categories of DME:

  • • Oxygen Supplies and Equipment
  • • Standard (Power and Manual) Wheelchairs, Scooters, and Related Accessories
  • • Enteral Nutrients, Equipment and Supplies
  • • CPAP Devices, Respiratory Assist Devices, and Related Supplies and Accessories
  • • Hospital Beds and Related Accessories
  • • Walkers and Related Accessories
  • • Support Surfaces (Group 2 Mattresses and Overlays)
  • • Negative Pressure Wound Therapy (NPWT) Pumps and Related Supplies and Accessories

According to John Shirvinsky, Executive Director of the Pennsylvania Association of Medical Suppliers (PAMS), “Eighty-two percent of Philadelphia area providers (within 50 miles of the Philadelphia-Camden-Wilmington bidding area) have been eliminated in favor of providers from as far away as Texas and California.” He said that “Philadelphia-area Medicare beneficiaries will be faced with travelling about 350 miles to visit the average contracted provider unless Congress acts to ensure more-patient-friendly options.” (see chart below)

DME

“Similar beneficiary access problems have been created in the Lehigh Valley and the Scranton-Wilkes Barre area,” Shirvinsky said.

“As homecare providers, one of our primary missions is to provide quality healthcare in the home environment. This results in tremendous savings to overall Medicare and Medicaid spending because it allows us to treat people with serious health conditions in their own homes rather than in higher cost settings such as hospitals or nursing homes,” he said.

He predicted that the bid program will have a negative impact on the overall cost and availability of durable medical equipment in the region. “Not only is homecare the most cost-effective form of care for the elderly and the disabled, it is the most patient-preferred,” Shirvinsky noted. “If this form of care is either unavailable to most or if the quality of product and services offered are diminished, these populations may be forced into costlier care settings.”
“Because of the way the Medicare bureaucracy manipulated the bidding process, many contract winners will choose low cost/low quality products from companies overseas, rather than higher quality products built in the USA. This program is creating a race to the bottom on price and will likely result in more jobs being shipped overseas.”

The program has also been besieged by licensing irregularities and it has recently been revealed that 30 firms in Tennessee and more than 100 firms in Maryland have been exposed as having failed to secure the necessary licenses to do business in those states. Nearly half of those non-licensed bid winners hold contracts in the Philadelphia bid area.

According to Shirvinsky, “These firms should be excluded from serving any bid areas and most of these rule-breakers hold contracts in the Philadelphia bidding area, which includes a part of Maryland.” He said that because these were clearly stated pre-bid requirements, the bids of these offending firms should be excluded from the bid calculations according to the program’s rules. “This will throw the entire bid process into a state of chaos, but the chaos is of Medicare’s own making.”

Earlier this year, a bipartisan coalition of 227 Members of Congress, including 82 Democrats and 145 Republicans, sent a letter to the Medicare administrator that outlined critical flaws and abuses in the bid program and requested that Medicare delay further implementation until such issues are fully address and fixed.

“A bipartisan majority in the U.S. House of Representatives sent a letter to Administrator Tavenner documenting specific failures and abuses that took place under Round 2 of competitive bidding for DMEPOS,” according to Pennsylvania Congressman Glenn Thompson (R – Centre County), who led the effort along with Iowa Congressman Bruce Braley (D). “Since that time, the Medicare Administrator responded to members of the Tennessee delegation who sent a letter to the agency outlining a similar set of concerns. The Administrator’s response was evasive, incomplete, and failed to answer these serious questions. If this response is any indication of what the Administrator believes to be an adequate response, we have a problem.”

“Medicare has broken its own rules and the Administrator has neither addressed how these abuses occurred nor what corrective actions the agency will take,” Thompson added. “Unfortunately these failures are not limited to Tennessee, rather they illustrate widespread systemic flaws that have plagued the program. Alternative actions must be considered.”

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