HME Claims in Round One See Staggering Plunge

Plummets as stiff as 82 percent point to patient access crisis.

By David KopfJan 19, 2012

Medicare claims for HME covered by Round One of competitive bidding dropped by as much as 82 percent during in 2011, according to analysis of Round One data conducted by University of Maryland economist and auction model expert Peter Cramton. At the same time, the risk of death and hospitalization for beneficiaries needing HME spiked sharply.

The sharp drop in claims suggests a dramatic decline in access to care for Medicare beneficiaries living in Round One bidding areas who need home medical equipment and services, according to report on Cramton's data by the American Association of Homecare.

The drop in access runs counter to the claims made by the Centers for Medicare and Medicaid Services (CMS) that its competitive bidding program would reduce the number of HME providers without reducing access to care or reducing claims.

Cramton and his colleagues obtained Medicare claims data through a Freedom of Information Act request. CMS has not previously shared this data with AAHomecare or with Congress, according to the association. The association says it has already started alerting congressional offices to these findings and will continue to analyze the information.

Comparing annualized 2011 claims data to 2010 claims, HME items subject to bidding in all Round One areas fell by the following percentages:

Complex rehab: -82.1 percent
CPAP devices: -63.7 percent
Diabetic supplies: -74.1 percent
Enteral nutrition: -65.0 percent
Hospital beds: -63.7 percent
Oxygen: -61.7 percent
Standard power: -81.5 percent
Support surfaces: -73.8 percent
Walkers: -71.5 percent

To determine the findings, Cramton and his colleagues also looked at the increased risk for Medicare beneficiaries who are eligible but not using prescribed HME items, compared to beneficiaries who are using the HME item.
The increased risk of death was 106 percent for non-users of mail-order diabetic supplies. Their risk of hospitalization was 36 percent higher. Non-users of oxygen in the “narrow access group” faced a 79 percent higher risk of death and a 54 percent higher risk of hospitalization compared to Medicare beneficiaries who receive home oxygen therapy.

Professor Cramton will issue more detailed analysis soon, and AAHomecare will provide more information in the days ahead.

"The startling and dramatic numbers from Round One underscore the fact that the current competitive bidding program is dangerously flawed and must be stopped," read a statement from AAHoemcaer. "Congress must include the alternative Market Pricing Program which will achieve market prices without jeopardizing beneficiaries’ health or destroying the HME community."