For Medicare users, vendor choices dive

As new Medicare rules take effect today, longtime local suppliers of wheelchairs and other medical equipment are complaining that the federal government's new bidding process will devastate their business and degrade service to patients.

“Quite frankly, I believe it's a train wreck in progress,” said Bill Griffin, owner of Griffin Home Health Care on Monroe Road. “Rather than improving the competition, this is actually taking away competition.”

As of today, only 325 approved suppliers nationwide will be allowed to provide Medicare recipients with 10 common home health care items. It's a significant decrease in the number of approved suppliers.

In the Charlotte region, for example, about 75 companies have provided oxygen and respiratory equipment. Starting today, there will be 12.

The new bidding requirements are intended to reduce fraud, cut patients' costs and save Medicare $1 billion a year. But critics have complained to Congress that the new rules will reduce the convenience and quality of some services patients get now.

Some senators, including North Carolina's Elizabeth Dole, say they still hope to get new rules put on hold.

“It's very frustrating that the Senate couldn't get this bill passed,” Dole said in a statement. “Now, it is important for Congress to deliver a retroactive fix – and then a permanent solution.”

Congress mandated the competitive bidding process in its 2003 Medicare modernization bill. Charlotte is one of 10 metropolitan areas where it's being tried first. About 4 million beneficiaries are affected in the 10 markets.

Medicare is a government health care program for the disabled and for seniors 65 and over. Of the $382 billion total Medicare expenses in 2006, about 3 percent was for home medical equipment.

Griffin's business has provided a full line of home health care equipment for 25 years, but the company's bids were rejected because they were too high. He said two out-of-state firms that did win the bid have contacted him about being a subcontractor for them. He can't, he said – because they want to pay him too little for his service.

Of the 1,005 suppliers that competed in the bidding process nationwide, 38 percent were approved. The losers have no right to appeal and will have to wait three years to bid again.

Dennis Loflin – another N.C.-based medical services supplier who lost out – points out that one of the companies that won the bid to provide wheelchairs in the Charlotte area is Scooter Store of San Antonio, Texas. That company paid $4 million last year to settle allegations that it had overbilled Medicare by about $30 million, according to the Department of Justice.

Customers who already have equipment will be “grandfathered” in. They can keep the equipment they have; and the providers, even if they weren't winning bidders, can continue to get reimbursed by Medicare for equipment they've already placed.

Charlottean Eileen Paroff learned about the changes in a letter from Medicare that arrived last week. Her 65-year-old husband, who is disabled, uses an oxygen concentrator and a C-PAP machine to help him breathe and sleep. But the current supplier of that equipment, CMC-Home Infusion, a unit of Carolinas Medical Center, isn't on the list of winning bidders.

She thinks their two machines will be “grandfathered,” but they will have to find a new approved supplier for tubing and filters.

Usually, she said, patients have received prescriptions from a doctor, who suggests companies to use. Now, that's changed.

“They give you no guidance,” Paroff said. “How do you know who the best one is? It's just sort of throw a dart and pick one.”

The Miami Herald contributed.