Article - June 8, 2008 - The Associated Press

Lawmakers question program to cut medical equipment costs

By Kevin Freking
WASHINGTON (AP) — Makers and sellers of wheelchairs, oxygen machines and other medical equipment are on the verge of getting Congress to delay, if not scrap, a new program the Bush administration says would save Medicare about $1 billion a year. For years, lawmakers and the Bush administration have complained that Medicare pays much more than private insurers and the general public for medical equipment. For example, Medicare pays $1,825 for a hospital bed that can be found on the Internet for about $750, says the program's acting administrator Kerry Weems.

In 2003, Congress authorized a new payment system. It determined that Medicare would quit paying a set fee that the government updates annually. Instead, local vendors would bid for Medicare's business. Five years later, that program is ready to start. It's being rolled out gradually, affecting 10 cities beginning July 1. Next year, 70 additional cities would come online.

Vendors bid so aggressively in the first round that beneficiaries in the 10 communities involved would see a savings of about 26 percent in their co-payments for medical equipment.

However, hundreds of vendors did not win a contract. Many have offered quality services for decades. They complain that Medicare rejected them for submitting insufficient financial information, but they didn't know it was insufficient until too late in the process. Another concern is that some companies who won bids have no history of serving particular communities, calling into question their capacity to serve the elderly and disabled.

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