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Consortium for Citizens with Disabilities Health Task Force Co-Chairs

Kathy McGinley (202) 408-9514
Julie Ward (301) 459-3700
Peter Thomas (202) 466-6550
Bob Griss (202) 842-4408
Brian Rasmussen (202) 776-0406

July 18, 2002

The Honorable Thomas Daschle
Senate Majority Leader
C/o Jane Loewenson
United States Senate
509 Hart Senate Office Building
Washington, D.C. 20515

RE: CCD Health Task Force Opposes Medicare Competitive Bidding Proposal

Dear Majority Leader Daschle:

As the Senate considers the provider payment section of the Medicare reform bill, the undersigned members of the CCD Health Task Force urge you to oppose the implementation of Medicare competitive bidding for durable medical equipment ("DME") and some orthotics. Medicare beneficiaries with disabilities and chronic conditions rely on these devices and services to remain functional and independent. CCD believes that the incremental benefit that Medicare beneficiaries might realize from competitive bidding (as a result of slightly reduced co-payments) is far outweighed by the serious threat to quality, access, and choice of provider that this proposal represents. The House has included competitive bidding in its Medicare reform legislation and we strongly urge the Senate to oppose these provisions and not cast people with disabilities to the lowest bidder.

CCD's Health Task Force is a coalition of national disability-related organizations working together to advocate for national public policy that ensures self determination, health, independence, empowerment, integration, and inclusion of children and adults with disabilities in all aspects of society. For too long, the DME competitive bidding debate has been dominated by providers and suppliers of DME, and disability-related organizations have not been heard on this

important issue. Now that DME competitive bidding has been included in the House bill, we feel that it is time to express our views.

Under the current Medicare program, the reimbursement level for DME, orthotics, prosthetics and supplies is set by fee schedule and providers and suppliers compete for Medicare patients based on the quality of the service they provide to the beneficiary, how quickly service calls are performed, how responsive the company is to the physician who refers the patient, and how functional the patient is with the service and/or device provided. Under government-imposed competitive bidding:

· Price becomes the sole and determining factor in securing Medicare referrals and the quality of care and range of services provided to the patient are sacrificed in order to put forth a low bid;

· The quality of care is bound to suffer as providers search for ways to cut corners and costs so they can make ends meet. It will not take long before providers discontinue product lines that are no longer sufficiently profitable or that require extra time or attention to the beneficiary, to the detriment of patient outcomes;

· DME that is customized to the patient is nearly impossible to competitively bid as one is not comparing identical products. Customizing DME entails the skills of the provider, the experience of the provider with similar or complex patients, and different techniques for achieving particular therapeutic goals. This is evident in wheelchair design that requires customization and other DME such as oxygen therapy that requires a high degree of service.

· Competitive bidding should never be considered for professional orthotic and prosthetic care due to the uniqueness of the service, the high degree of clinical/professional care involved, and the customization entailed in providing orthotic (orthopedic braces) and prosthetic (artificial limbs) care. Even competitive bidding of "prefabricated" orthotics is problematic because it treats orthotic care as the provision of a commodity rather than recognizing the clinical/professional judgment required to provide quality care;

· Medicare beneficiaries under the fee-for-service program will be restricted in accessing the provider of their choice. Long-standing relationships between beneficiaries and familiar providers will be interrupted causing disruption in service and dissatisfaction for patients. Small, community-based providers will be displaced by larger chain providers that can take advantage of economies of scale, but which may not be in the interests of beneficiaries. Beneficiaries who do not value choice of provider have the option of joining the Medicare Plus Choice program, but the key feature of Medicare's fee-for-service program is choice of provider and this must be vigilantly safeguarded;

· The efforts of companies, entrepreneurs, and researchers to innovate in this area will be significantly curtailed if there is not an adequate funding stream to reward innovation; and

· Implementation of Medicare competitive bidding is premature in that the impact on beneficiaries of the two competitive bidding demonstration projects has not been adequately assessed. In fact, the only study that assessed this issue stated, "It is premature to declare that competitive bidding is either an appropriate or an inappropriate reimbursement mechanism for durable medical equipment and related items."

For these reasons, the undersigned members of the CCD Health Task Force strongly urge you to oppose the imposition of competitive bidding on Medicare durable medical equipment, orthotics and prosthetics. Thank you in advance for your consideration and if you have questions, please call Health Task Force Co-Chair, Peter Thomas at (202) 466-6550.

Sincerely,

Adapted Physical Activity Council
Advancing Independence: Modernizing Medicare & Medicaid
American Academy of Physical Medicine & Rehabilitation
American Association on Mental Retardation
American Association of People with Disabilities
American Council for the Blind
American Medical Rehabilitation Providers Association
American Therapeutic Recreation Association
Brain Injury Association
Disability Rights Education and Defense Fund, Inc.
Easter Seals
Paralyzed Veterans of America
Rehabilitation Engineering and Assistive Technology Society of North America
Research Institute for Independent Living
National Association for the Advancement of Orthotics and Prosthetics
National Association of Protection and Advocacy Systems
National Council on Independent Living
National Organization on Disability
The Arc of the United States
United Cerebral Palsy Association

cc: The Honorable Trent Lott (C/o John Mashburn)
The Honorable Max Baucus (C/o Pat Bousliman)
The Honorable Charles Grassley (C/o Linda Fishman)
The Honorable Tom Harkin (C/o Peter Reinecke)
The Honorable Bob Graham (C/o Jocelyn Moore & Lisa Layman)
The Honorable Max Cleland (C/o Tamara Jones)